Learning About "Tax-Incidence"
Via OldWhig, who tweets as @aClassicLiberal, I came to this blog post by A Very British Dude, with the term "tax-incidence":
Lefties often reject widely accepted economic concepts like tax-incidence, the idea that the economic burden of a tax doesn't always fall on those writing the cheque. If corporation tax was abolished, some of the extra money would go to shareholders who pay CGT and income tax on dividends (at a slightly lower rate), however much would go to customers in the form of lower prices (does anyone argue that the mobile phone market isn't competitive?) with the money spent (and taxed elsewhere) or workers in the form of higher wages, resulting in a much higher rate of tax.
"Lefties often reject widely accepted economic concepts..."
That explains quite a bit, in and of itself.
AB at December 1, 2013 4:57 AM
When corporations stop lobbying for laws that restrict our freedoms and crush the competition, all to pad their bottom lines, I'll be happy to support eliminating the corporate income tax.
As it is, I do wish it were lowered to 15 percent.
mpetrie98 at December 1, 2013 7:49 PM
Corporate taxes are, in the end, paid by the corporation's shareholders, employees (from the CEO on down), customers, and suppliers. How much of the burden falls on each group varies from case to case, and depends on a tangle of economic factors which no one could possibly sort out with any degree of certainty.
Rex Little at December 1, 2013 8:37 PM
mpetrie98: My family business was incorporated thirty years ago. It wasn't some mega-thing, either, but one thing was obvious:
Corporate taxes are paid by the consumer, not by the corporation.
Taxes are an expense. So, they cut profits. If they cut enough, then they raise the price of the product and reduce demand.
There is widespread hooting about corporate this or that. Most of it is based on wealth envy.
It's not that a corporation makes money. It's that a government agency piggybacks on it without providing value.
Radwaste at December 2, 2013 4:41 AM
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