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A Stupidity Tax
21 Jun 2011 17:33 #55
by LOL
If you want to be, press one. If you want not to be, press 2
Republicans are red, democrats are blue, neither of them, gives a flip about you.
Replied by LOL on topic A Stupidity Tax
Increase Corporate tax rates +1%
It is an interesting mathematical brain teaser. Follow the money and the balance sheet.
In the static situation, all revenues and therefore taxes are paid by customers.
In the dynamic situation, year-over-year say, a delta increase of 1% in corp income taxes, results in a decrease in net income for the evil corporation.
Now it gets complicated. It could reduce (taxable) dividends to shareholders (which were taxed 2x). It could reduce net income used to grow the business. (and jobs). It could reduce capital used to buy back shares, increasing stock price, and cap gains taxes. There is no single answer in the dynamic model. Prices for products and services are generally set by market forces, which are complex. If the co. has no pricing power (no monopoly) they will eat it for awhile, then adjust, and eventually lay off some employees, cut pay/bennys, move labor to China, or lobby for some new tax deductions. Simple really. Evil corps. will change though, we are not talking about the US post office here, stuck in the 1950's (and losing tens of billions/yr).
End of Joe's Capitalism 101 rant.
It is an interesting mathematical brain teaser. Follow the money and the balance sheet.
In the static situation, all revenues and therefore taxes are paid by customers.
In the dynamic situation, year-over-year say, a delta increase of 1% in corp income taxes, results in a decrease in net income for the evil corporation.
Now it gets complicated. It could reduce (taxable) dividends to shareholders (which were taxed 2x). It could reduce net income used to grow the business. (and jobs). It could reduce capital used to buy back shares, increasing stock price, and cap gains taxes. There is no single answer in the dynamic model. Prices for products and services are generally set by market forces, which are complex. If the co. has no pricing power (no monopoly) they will eat it for awhile, then adjust, and eventually lay off some employees, cut pay/bennys, move labor to China, or lobby for some new tax deductions. Simple really. Evil corps. will change though, we are not talking about the US post office here, stuck in the 1950's (and losing tens of billions/yr).
End of Joe's Capitalism 101 rant.
If you want to be, press one. If you want not to be, press 2
Republicans are red, democrats are blue, neither of them, gives a flip about you.
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