That when government levies huge new taxes on businesses and rich people that it doesn't affect anyone else? Guess what? The businesses increase the prices on their goods and services and who are the main consumers of goods and services in the US? The middle class, that's who. What should we call it? Maybe "Trickle Up Economics"? Just a thought. If there are any economists who belong to this site, please set me straight on this.
you are so wrong its just funny.
Taxes do not factor into corporate prices because taxes are NOT a cost of doing business. ONLY profits get taxed.
What that means is that passing the cost of taxation on to the consumer simply gets them taxed MORE...because the only thing it could do is increase profits. ( since federal taxation is not deductible as a business expense- and since they must already be more than covering their costs to make a profit to even
be taxed. )
When corporations are taxed ( which they are and at a fairly high rate already) they are faced with a dilema...
Profits are simply divided among the shareholders as dividends... not a lot of money per person unless you happen to be a HUGE shareholder.
However, money they spend on their own companies... buying other companies, opening new outlets, increasing capacity, developing new products or services....
That money becomes EXEMPT from taxation. ITs no longer profit.
So corporate boards try and do a balancing act... between claiming just enough profit to keep their shareholders happy... money they will have to split with the IRS.... and pumping all their surplus income back into investing in the company itself... money the company gets to "keep".
Therefore, increased corporate taxation actually drives companies to invest in themselves and growth, as a way to evade taxation.
Lower taxation drives them to take the money out in the form of dividends and bonuses for board members. Making the board personally richer.
That money does not contribute to growth or creating jobs because board members and major share holders do not make most of their money from dividends....
They make most of their money from speculations based upon stock prices- from buying and selling.
Because of this... total profits are not as important as company growth in determining stock prices. Boards will tend to opt on re-investment over profits to get even more money from stock prices than they can from dividends.
And keep in mind that for MOST americans Stock market investing is gambling.
But that most major players and board members have inside information that enables them to make huge amounts of money on stock manipulation.
The most common is for them to encourage employees to exercise stock options, when the Board knows full well that the next quarter report will result in a drop in stock price.
The employees buy in... and then the report comes out and the price drops...
And the board "supports" their stock price by buying up stock.
What you don't know is that the stock the employees bought is stock sold by the board months before- at a high price... and then the board buys back that stock at a lower price...
The effect? The board just sucked millions of dollars out of their own workers pockets, and into their own... and they own even more stock.
These kind of shenanigans are endemic.
-
Beyond that... the real issue is not corporate taxation... corporations are actually taxed pretty high... to drive investment in growth.
The real issue is PERSONAL taxation of the wealthy.
Eliminating capital gains tax, inheritance tax and enabling tax shetlers allows the super rich to evader nearly all taxation.
This money is not being re-invested into the economy... its accruing wealth for the wealthy.
The republicans want a return to the JP Morgans and Andrew Carnegies...
The company store and indentured servitude.
You can not have a genuinely free market when money buys influence and control over the laws governing that free market.
All computer models of free markets, run long enough, result in ALL the money in the hands of 1 or 2 individuals.
Regulated markets are what made America Great... its what's working for the Chinese.