Bowfinger
Lifer
- Nov 17, 2002
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That's great spin, but it's all smoke and mirrors designed to get average wage-earning Americans to vote against their own interests. The relevant tax for this issue is the business income tax, not this fantasy tax on goods you're postulating. Business income taxes are taxes on profits, not on goods or property or revenue. If one raises the profit tax on businesses, it comes out of the pocket of the business owners, e.g., stockholders.Originally posted by: ZeroIQ
It increases across the board on everything they're selling. It also affects the amount they can pay the employees and the benefits they are able to give. The companies do eat some of the taxes, I'm sure, depending on the industry and whatnot, which affects their R&D, which has a direct impact on us and their employees.Originally posted by: OrByte
I am not a tax expert by any means. But I don't agree with you that its the inefficiency of the tax burden that is actually worse for Americans than a direct tax increase.Originally posted by: sactoking
If there's no functional equivalent between raising taxes directly and indirectly, why be disgusted?
Or better yet, maybe the American people should be MORE disgusted that Obama plans to raise their tax burden and not their taxes! Why? In the end, whether you charge me $5 in taxes or you charge AM/PM $5 to sell a Big Gulp, that $5 gets passed to SOMEONE. When you do it indirectly, all you do is increase inefficiency. Collecting $5 in taxes will cost the economy less that collecting $5 from AM/PM and having AM/PM collect it from me.
Don't tell us that raising tax burden is some sort of lie or 'out' using semantics. IT IS WORSE THAN DIRECTLY TAXING US!
I don't understand how if AMPM gets taxed $5 to sell a Big Gulp, then AMPM will pass that entire $5 tax increase down to me as a consumer. Is that increasing that big gulp price by $5? I think its more likely that if the tax burden for a corporation increases, then that corporation will POSSIBLY pass down that increase by some factor of the increase relative to whatever market demand price there is for it's product. In other words, that same Big Gulp will not have a price increase of $5 but more likely $.05.
In other words. IMHO its the very inefficiency in any tax increase passed to Businesses that protects Americans from having to dig deeper into their wallets wherein the alternative would be to pay for a direct tax increase.
I'm no expert, but I don't see the price of my Big Gulp increasing by a 1to1 factor related to any tax increase.
While those owners may want to increase the price of goods to compensate for increased profit taxes, if the business is properly managed, they can't. Increasing their prices would actually be counterproductive, reducing their profits. Why? Basic economics. A properly-managed business will set its product prices to the optimal value that yields the greatest profit. If they lower prices, their margin drops and they profit less. If they increase prices, their sales drop and they profit less. Increasing product prices to offset increased profit taxes doesn't work.
Obviously real-world economics aren't quite this black and white, but the fact remains that all the crying about "increased profit taxes will be passed to consumers" is just another smoke screen. The reality is that increased profit taxes primarily affect investors. Like all taxes on investors, it is the very rich who pay the most, with average American wage earners seeing only a minor effect.
Edit: typo
