If corporations can pass all taxes to consumers with price hikes, why do

S

Sadcat

New member
corporations fight tax increases? And a final point: if corporations fight tax increases because they are worried that higher prices will decrease sales, doesn't that simply illustrate the point I'm making--that corporations themselves bear part of the burden for taxes they pay?
I see this argument all the time on Yahoo! Answers:

"Corporations don't REALLY pay taxes. If you increase corporate taxes, the corporations will simply increase prices on products, so consumers end up paying all corporate taxes."

If that is true, why do corporations routinely oppose tax increases and find any way possible to minimize taxes?

Isn't it obvious that the the consumer is not willing to pay whatever corporations charge for products, and that, as a result, a corporation may respond to increases in taxes by:

1. Decreasing dividends;
2. Increasing prices on sales of foreign, not U.S. goods;
3. Cutting employees;
4. Cutting executive compensation or reducing the number of executives;
5. Structuring itself so as to minimize tax expense by reducing retained earnings and/or increasing deductible expenses?

Where does this silly argument that consumers bear the burden of ALL corporate taxes come from? It flies in the face of the most basic economic principles doesn't it?
FYI: Chinese corporations pay the same taxes on income earned from sales of US goods that US companies pay. This is under section 881 of the Internal Revenue Code.
 
If you live in a country of 600 with closed boarders THEN you can be fairly sure that no new types of taxes will really matter, because the consumer will pay the burden of all taxes anyway.

Unless of course that nation is sane.

Then if evil takes over and economically subverts the whole nation to the interests of a "petty few" then that nation can in fact and usually does "redistribute" the wealth, taking the money from the despots one way or another and etc.

And there is nothing those rich cats can do about it, save leave.

But even then they loose, because their money is based on a currency formed in a now bankrupt nation. And that nation's currency is not worth anything. So the money they take isn't worth stealing.

Cause after all money is not "money" as neo-conserfatives think of it. It is the reflection of a nation's trust in the holders of that money.

Invasions do occur sometimes when a nation defaults on loans, because the rich aren't faithful to a given nation. But even this is increasingly rare.
 
Corporations have to compete in a free marketplace. They do not want their prices to go up as it effects the amount of sales. Econ.101
 
There are recent examples of energy companies backing cap n tax legislation, so companies do not always oppose tax increases. Sometimes there are other factors at work, such as attempts to curry favor with politicians.
 
Umm, all those other options you listed ALSO affect consumers in one way or another, so the "silly argument that consumers bear the burden of ALL corporate taxes" still holds. Do you think before you type?
 
the funny thing is that the people who make the corporate tax trickle-down argument are usually the same people who rave about the benefits of an unregulated free market and denounce the bailouts.

Okay, let's try to unravel this convoluted thinking:
corporate taxes are bad because they are passed on to the consumer in the form of higher prices; AND
an unregulated free market is best because it would increase competition and lead to the lowest prices and best goods for consumers; AND
bailouts are bad because companies should be allowed to fail;
so, therefore, we should not increase corporate taxes because the free market will not be able to compensate for the tax and will pass the tax along to the consumer. Some people then might decide a product is too costly and decide not to buy it. If enough people decide not to buy a company's product, the company will go bankrupt and that would be bad.

so we can clearly see that...bailouts are good? the free market doesn't work?
 
the funny thing is that the people who make the corporate tax trickle-down argument are usually the same people who rave about the benefits of an unregulated free market and denounce the bailouts.

Okay, let's try to unravel this convoluted thinking:
corporate taxes are bad because they are passed on to the consumer in the form of higher prices; AND
an unregulated free market is best because it would increase competition and lead to the lowest prices and best goods for consumers; AND
bailouts are bad because companies should be allowed to fail;
so, therefore, we should not increase corporate taxes because the free market will not be able to compensate for the tax and will pass the tax along to the consumer. Some people then might decide a product is too costly and decide not to buy it. If enough people decide not to buy a company's product, the company will go bankrupt and that would be bad.

so we can clearly see that...bailouts are good? the free market doesn't work?
 
Nope - you missed major point - US places taxes on US corporations. SO...if I'm a chinese company, I love it when you increase taxes because the US product is now more expensive.
 
"And a final point: if corporations fight tax increases because they are worried that higher prices will decrease sales, doesn't that simply illustrate the point I'm making--that corporations themselves bear part of the burden for taxes they pay?"

Yes, I guess ultimately that's right, but those with the class warfare mindset of "let's go get the corporations" often don't realize that you can't get them without them getting everyone at the same time.

If the end result is that everything keeps costing more... why do that? Isn't that the reason why we outsource and import everything? Because it's too expensive here? I often hear these complaints, and they are legitimate, but then these same people will turn around and suggest we punish corporations more, not realizing it is symptomatic of the problem.
 
Nope - you missed major point - US places taxes on US corporations. SO...if I'm a chinese company, I love it when you increase taxes because the US product is now more expensive.
 
"And a final point: if corporations fight tax increases because they are worried that higher prices will decrease sales, doesn't that simply illustrate the point I'm making--that corporations themselves bear part of the burden for taxes they pay?"

Yes, I guess ultimately that's right, but those with the class warfare mindset of "let's go get the corporations" often don't realize that you can't get them without them getting everyone at the same time.

If the end result is that everything keeps costing more... why do that? Isn't that the reason why we outsource and import everything? Because it's too expensive here? I often hear these complaints, and they are legitimate, but then these same people will turn around and suggest we punish corporations more, not realizing it is symptomatic of the problem.
 
You are stipulating that coroprations 'routinely' oppose tax increases.

Who told you that? How did you arrive at that conclusion?

Have you seen the top political corportate contributors and where their money went?
Here's a sampling of the monster corps who contributed to 0'bama fully expecting tax INCREASES.
Goldman Sachs
Microsoft
Citigroup
Google
JP Morgan
Time Warner
Morgan Stanely
IBM
General Electric.

Your premis started out on a very shaky foundation.
 
"And a final point: if corporations fight tax increases because they are worried that higher prices will decrease sales, doesn't that simply illustrate the point I'm making--that corporations themselves bear part of the burden for taxes they pay?"

Yes, I guess ultimately that's right, but those with the class warfare mindset of "let's go get the corporations" often don't realize that you can't get them without them getting everyone at the same time.

If the end result is that everything keeps costing more... why do that? Isn't that the reason why we outsource and import everything? Because it's too expensive here? I often hear these complaints, and they are legitimate, but then these same people will turn around and suggest we punish corporations more, not realizing it is symptomatic of the problem.
 
You are stipulating that coroprations 'routinely' oppose tax increases.

Who told you that? How did you arrive at that conclusion?

Have you seen the top political corportate contributors and where their money went?
Here's a sampling of the monster corps who contributed to 0'bama fully expecting tax INCREASES.
Goldman Sachs
Microsoft
Citigroup
Google
JP Morgan
Time Warner
Morgan Stanely
IBM
General Electric.

Your premis started out on a very shaky foundation.
 
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