Yeah, I get attorney Carli Pierson’s point in her op-ed in USA Today. She wants billionaires and big corporations to pay more in taxes. What I want to know is how she intends to accomplish that. We know with a confidence based on experience that increasing marginal rates and wealth taxes won’t accomplish that goal. What they will do is
- Encourage billionaires and big corporations to spend more on tax lawyers and lobbying to lower their tax bills and
- Encourage billionaries and big corporations to move where the taxes are lower.
I don’t think it’s a matter of “fairness” but of practicality. I don’t agree with her on the corporate tax by the way. I think
+ the fairest tax on corporations is zero.
Saw this relevant earlier and found it significant due to the unusual honesty in the exchange:
https://www.bloomberg.com/news/articles/2021-09-21/johnson-says-he-told-bezos-amazon-must-pay-fair-share-of-taxes
Shorter: your problem not mine.
Let me restate my point. It’s easy to complain about fairness, harder to craft laws that can actually get enacted, and harder still to extract more revenue from people with the resources to avoid paying more.
I don’t understand why there is a corporate tax at all since taxes get passed on to consumer, so all the corporations become are tax collectors, at least in my view. I don’t claim to understand it all, but the messaging for it is confusing to me.
Not just the company’s customers but to its employees.
I agree with you, Mike. I think the arguments for increasing the business income tax are superficial and based on a weak understanding of economics which is to say a weak understanding of human behavior.
When people talk about “taxing rich corporations” those not simply engaged in the Willie Sutton philosophy or simple demagoguery, generally mean senior managers – because they hate their bosses – or the owners – capital.
Not to get too hyper-technical, but since the corporation is just a set of papers generally filed in Delaware, the incidence of the tax can really only fall to capital, labor, suppliers or customers. As all of these parties are already engaged in a constant negotiation the question boils down to who has the greatest leverage.
Its situational, but suppliers generally don’t suffer or benefit from a change in the tax code.
Customers tend to be disorganized and often have higher prices imposed upon them. Else they forego purchases. Employees tend not to be extremely mobile, and suffer accordingly. And then we have capital. Large corporate is capitalized with and employs very mobile capital. It can disappear from the US. Small business, generally non-mobile capital, can get slaughtered to the point of being driven out of business.
Net net its the wage earning class and the small business class who suffer the most. Anyone want to tell me again how Biden or progressives are good for the Average Joe, or America?
My impression is that most members of Congress have little feel for math and not much understanding of economics. I think they tend to believe that demand is inelastic with respect to price. I also think that few believe there should be an equity risk premium.