BrentD
Well-known member
If it is so painless, then why to do they (corporate) even care? Your view of the way the world works is maybe WAY too simplistic.
Ukraine / Russia
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TheJason
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I didn’t see prices go down for the consumer after the massive corporate tax cuts.
Nick87
Well-known member
Has it gone down ever for the working family? Serious question as I'm (somewhat) young...
I have a simplistic view because it is simple economics. When expenses increase, the cost of goods increase. It doesn't matter if it is taxes, the minimum wage, or the price of eggs. If any of those expenses increase, it is passed on to the consumer......as much as possible. This hits the lowest wage earners the hardest. The ones that it is supposedly there to benefit. Do you disagree?
TheJason
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Only when supply outruns demand. Not from a corporate tax cut that I can recall.
VikingsGuy
Well-known member
That isn’t how it works. They have benchmark financial after tax return expectations and they make it up however the situation allows. For some it may be passed on to customers, for some it could be squeezing vendors, for some it could be moving work off shore, for some it could be using cheaper materials, for others it may be layoffs, for others it could be deferred growth or innovation efforts, etc etc.
I agree there is no free lunch and somebody will pay the bill - but it isn’t always consumers.
There is no corporation fairy that can just write checks to the govt, the money comes from somewhere in the value chain - which is us. And even if a corp just reduced its profitability, then all the pensions invested in the markets take a hit. Corps are a soundbite-friendly foil but corp taxes are not the panacea some think they are.
Nick87
Well-known member
Not from any politicians policies directly that I recall regardless of which side of the aisle, but well keep digging so the fat cats gets fatter and those on government aid get there's. Middle class always has to make it up.
So replace consumer with middle class and that's who picks it up regardless where the cut is shit rolls down hill.
Got it
VikingsGuy
Well-known member
I am not playing the middle class card. For example deferred innovation spending isn’t class based. Sometimes choices hit them, sometimes not. But if our corptax rates are higher than many other jurisdictions all Americans lose - rich, poor and in between. The right number is not 0% or 10% or 50%, it is whatever competing countries are charging. And until 5 years ago we were uniquely high in large industrial countries. Germany for example has a 15% federal rate. France is 15% to 26% depending on size. Etc.
VikingsGuy
Well-known member
Beautiful reading. I am going to keep this reply as a wonderful gift - why America will fail - our inability to have discussion without arbitrary self confirmation being the key focus.
Nick87
Well-known member
VikingsGuy
Well-known member
There is some pretty good data that shows our middle class is the most taxed pampered among advanced economies. The mortgage interest deduction is just one such example. A plumber in Germany pays much higher personal taxes than a US plumber.
You can't see the contradiction in your previous post?
And what's this about me being the reason why America will fail? You claim to know me pretty well after a 2 word post
Nick87
Well-known member
This isn’t Germany.
BrentD
Well-known member
In a word yes.
Corporate tax cuts are an interesting subject. Most people believe if there are corporate tax cuts, the purpose is for the consumer.
That is far down the list.
The primary reason for corporate tax cuts are to increase a more sustained GDP.
GDP, (Gross Domestic Product) is defined as:
"A comprehensive measure of U.S. economic activity. GDP measures the value of the final goods and services produced in the United States (without double counting the intermediate goods and services used up to produce them). Changes in GDP are the most popular indicator of the nation's overall economic health."
So, in a sense, it does increase the sales to the consumer as supply becomes more in line with demand. When this occurs, demand value decreases and it becomes a semblance of cost saving to the consumer.
Basically, a country's economic standard is not a simple yes / no response. If you follow the tax cut principles, one of the end results is more domestic products available which reduces the increase value of demand.
VikingsGuy
Well-known member
No, as one poster said consumers pay for all corp tax increases. I said in response that it is not that simple and that there are many ways theses costs get managed (and consumers are but one of them).
And I made no comment about you as a person (who I do not pretend to know) but rather your post that seemed to ignore 80% of my point - in order to stick to the simplistic narrative.
Like you said, there isn't some corporate fairy that pays these tax increases. Everything you mentioned negatively affects the consumer. People who think that raising corporate taxes helps the lower/middle class are delusional.
Not saying that there should be zero corp tax. But increasing it hurts the people they claim to or think they are helping.
SAJ-99
Well-known member
Not sure that theory holds up. Mostly because you can’t isolate the tax cut (or rise) front the other dozens of variables that affect an economy.Corporate tax cuts are an interesting subject. Most people believe if there are corporate tax cuts, the purpose is for the consumer.
That is far down the list.
The primary reason for corporate tax cuts are to increase a more sustained GDP.
GDP, (Gross Domestic Product) is defined as:
"A comprehensive measure of U.S. economic activity. GDP measures the value of the final goods and services produced in the United States (without double counting the intermediate goods and services used up to produce them). Changes in GDP are the most popular indicator of the nation's overall economic health."
So, in a sense, it does increase the sales to the consumer as supply becomes more in line with demand. When this occurs, demand value decreases and it becomes a semblance of cost saving to the consumer.
Basically, a country's economic standard is not a simple yes / no response. If you follow the tax cut principles, one of the end results is more domestic products available which reduces the increase value of demand.
Taxes are applied to income. It’s a division of the final pie. Taxes go to a government entity who spends the money - also a component of GDP. Simply put, the theory politicians like to use is based on how a pie is divided will actually make the pie bigger or smaller. Hogwash. There is an optimal tax rate where it doesn’t affect behavior, but no one knows what that is. Regardless, we are spending more than we collect so something has to change eventually. Either revenue or expenses.
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