I'm tired of the "Corporations need to pay their fair share" BS mantra

100% correct.

Cost of taxation is just another cost, like labor, raw materials, energy, etc... that is embedded into the product or service that is sold by the business. If any of those costs go up, then business must raise prices to maintain their target profit margin. There is, or should be, little room in profit margins, due to competition, to absorb much cost increase without cutting cost elsewhere (usually labor), or raising prices.

With very little variation, business only passes cost of taxation on to their customers, therefore, they are only tax collectors, not tax payers.

 

Exactly how does that happen without the capitol provided by the stock holders?

I could just as easily say. I risk my capitol with the possibility of losing every thing or with the possibility of making a substantial profit. All the worker provides is a bit of labor with no risk whatsoever. He goes home with money in his pocket. While I I may or may not go home with money in my pocket.

 

What is your point here? My decision to buy one of your products has nothing to do with how much it cost you to produce. If I have $100 earmarked for widgets, and you offer me one at that price, I have no interest on what your tax liability is, whether you have a tax liability, whether you acquired the widget for free or spent $1,000 producing it. Not sure where you're going with this.

If you earn $1, the tax reduces that dollar. It doesn't take it away. You will make a profit, just less. You won't go out of business. Saying you will make no profit at all is incorrect.

It's just like less take home pay for a worker. I think someone mentioned that raising corporate tax can serve to weed-out incompetent and/or failed businesses. I agree with this. Regular people can fall into debt, credit cards maxed, not a dime to spare come payday. A tax increase would result in such people changing their spending habits; they can't just go in and demand a raise from their employer and expect to get it. It's no different for a business. Consumer prices rise with aggregate demand (and during shortages). This is what pushes wages higher, not taxes. Without an increase in aggregate demand, companies cannot raise prices while maintaining a current level of production. Production will drop, because supply and demand find equilibrium. Anyway, this all irrelevant. Long story short; weeding out those with poor business plans is like changing the spending habits of those over their head with credit cards.

Your production cost remains $99, irrespective of your tax liability. That's the point you won't address.

 

With the e

With the example I gave, you lose money.

Lets try it this way. When a hardware buys a hammer from the manufacture, they pay for the raw materials to make the head and handle and whatever else is used to attach it. They also pay electricity, rent on the building, heat cooling, pay to the employees and whatever expense is incurred by the manufacturer. None of those are itemized on in the bill from the manufacturer. He only sees ten hammers at $10 apiece. There was another cost born by the manufacturer which is not shown on the invoice. That is the corporate income tax. That corporate income tax is subtracted from the funds available to the stockholder. Dividends are paid after that corporate income tax is subtracted out. It is an expense just like electricity and rent.

 

much of our taxes go to support mega corps underpaying employees for their labor - without taxes, the price of your stuff will go up to match

"Wal-Mart Memo Suggests Ways to Cut Employee Benefit Costs " 2005

http://www.nytimes.com/2005/10/26/business/26walmart.ready.html?pagewanted=all

"Wal-Mart executives said the memo was part of an effort to rein in benefit costs, which to Wall Street's dismay have soared by 15 percent a year on average since 2002. Like much of corporate America, Wal-Mart has been squeezed by soaring health costs. The proposed plan, if approved, would save the company more than $1 billion a year by 2011."

"Ms. Chambers acknowledged that 46 percent of the children of Wal-Mart's 1.33 million United States employees were uninsured or on Medicaid."

an interesting Article, Walmart claims Healthcare raising by 15% a year back in 2005 under complete republican control...

 

Agreed, but it's not an either/or. A vibrant economy requires input from all sources. Sanders is entirely wrong on this matter, but the pendulum has swung too far to the corporate side. Time to bring it back toward the middle. It was way too far on the worker side in 1980, which Reagan corrected, but unabated, either side will end in disaster.

 

No you didn't. You earned a dollar. Where have you lost money? Is the government asking for more than 100% of your profits?

That is one convoluted argument. Let's stick to the basics here. No hidden costs. No phantom tax liabilities. Okay? It's not that difficult a concept.

Dividends have nothing to do with production costs. Dividends can be issued for any reason. Of course dividends are paid out of net profits. So what? That's rather obvious. My paycheck is net after taxes as well. You're not being very clear.

 

Why should I risk my hard earned money for less than a decent return? I was saving my money when many of my friends were buying fancy cars and houses. I don't see that I did much else that someone else could have done with a bit of sacrifice.

 

I did not earn a dollar with the example I gave. The cost of production for everything except the tax was $99 and I plan on selling it for $100. If I have to pay $1 in tax, I end up with nothing. No matter how much the tax is, it is subtracted from the amount of money I will take home.

 

<sigh> So much economic ignorance, so little time....

It depends very much on what is taxed, and how. Google "tax incidence" and start reading.

But first, let's dispense with a bit of sophism: it may be claimed that a corporation is just an agent for its owners, the shareholders, who really pay the taxes on the corporation. Fine. Let's just stipulate that if a tax is ultimately paid by a corporation's shareholders in proportion to the number of shares of that corporation they own, then it is the same as if the corporation is paying the tax. OK?

Nope. If a tax does not affect the selling price of a product, the consumer is not paying that tax. A tax on corporate profits is levied after expenses are paid, and does not affect the corporation's calculation of production or price. It is therefore not passed on to the consumer. I.e., if corporation A's management calculates that the most profit will be achieved by producing 1M widgets at a cost of $80 each and selling them for $150 each, for a gross profit of $70M, and fixed expenses are $50M, leaving net profit of $20M, the corporation's production and pricing decisions are not affected if it then has to pay $10M in tax on its profits. The consumer is therefore paying none of that tax.

No, it is not, as proved above.

That is mere sophism. The cost of goods sold has to be paid regardless. A tax on profits is only paid to the extent that there are profits. Say there is another widget producer, company B, that also sells for the market price of $150 (they can't charge more, because they can't affect demand). But because their management is not as skillful as company A's, their widgets cost $90 each to make and their fixed expenses are $60M, with the result that they make no profits. No profits, no tax. Please explain how the customers who pay Company A $150 for a widget are being taxed, while the ones who pay company B $150 for an equivalent widget are not being taxed.

I'm waiting. But I am not holding my breath.

That is probably not possible. Some false beliefs, especially in the areas of religion, politics and economics, are totally impervious to fact and logic.

 

The dividend eventually paid to the stockholders is ultimately reduced by the amount of the tax just like any other expense. No where in my dividends statement does it say a thing about what tax was paid on the profit. That tax is invisible to me except that it reduced the amount of my dividends. Just like the electricity used is invisible except it reduced the amount of my dividends. So however, you want to count it, that tax either reduced the amount of my dividends or it increased the cost to get it out the door. Just like any other expense.

 

You don't pay income tax until you sell the product. You made a dollar. You're taxed on that. I really don't know if you're confused or just unwilling to back down.

The OP is fake news. It's corporate propaganda that pops up every time there's talk of increasing the corporate tax rate. Common sense tells us companies can't raise prices at will, or else they would. The market tempers their ability to do so. This market exists independent of income tax policy. We can do away with theoretical arguments altogether. Let's look at the data.

US CPI 1991: 4.25%
US CPI 1992: 3.03%
US CPI 1993: 2.95%
US CPI 1994: 2.61%
US CPI 1995: 2.81%
US CPI 1996: 2.93%

I'd go on but it doesn't change. According to the data, prices went down after the Clinton tax increases. Case closed.

 

<yawn> Oh, gawd, here it comes....

No, that is merely the Voice of Economic Ignorance. YOU are wrong, OBJECTIVELY wrong. I have worked for many businesses, in a capacity that often required me to understand their operations and finances better than many of their managers did. I have worked for companies that made no profits for years at a stretch, even some that never made a profit in their entire existence. You are just OBJECTIVELY WRONG.

Objectively false. The great majority of companies lose money BECAUSE they are selling their products to customers for less than it costs to produce them. They demonstrate every year they operate that, contrary to your false claim:

Prices are in no way dependent on the cost of selling or producing a product. They are set by supply and demand, not cost. You are OBJECTIVELY WRONG. O B J E C T I V E L Y. And I do not care how long you have been in business or how many companies you have founded, because you are self-evidently not an accountant, let alone an economist, and you are comprehensively ignorant of the economics of tax incidence.

Again, that is just objectively false. The airline industry as a whole has NEVER made a profit in its entire history. You are spewing absurdities that any actual business person would blush to repeat.

No, it does not, except to the extent that it affects supply.

No. Every competent manager knows that businesses can't just tack all their costs onto their price, just as every competent accountant knows that a tax on profits is not a cost of production.

The burden of broad-based sales taxes is divided roughly 50-50 between vendors and consumers because there is a fairly random mix of elasticities of supply and demand. Google "tax incidence" and start reading.

Please explain how the customers of a firm that is profitable, and thus pays a tax on its profits, are being taxed, while the customers of an unprofitable firm that sells the same product for the same price are not being taxed.

Thought not.

Speaking of gullible, those who believe corporations can pass on all costs in price have to be the most gullible of all. How do they imagine any firm ever goes bankrupt, if all firms can pass on all costs in higher prices???

 

That is objectively false. Some expenses can be passed on to customers in various degrees, others can't. A tax on profits (or any input in fixed supply) can't.

No. The electricity presumably increased production. Your dividend did not.

Disproved above. Expenses are not all the same in their tax burden implications.

 

If you buy something for $99 and sell it for $100, you have made a pre-tax profit of $1.

You will pay corporation tax on this dollar at 21% = 21 cents.

This leaves you with 79 cents.

(Edited to add that corp tax rate here is federal only, as example.)

 

The buyer never sees how much corporate income tax is paid. He only sees the bill that the items costs $10. which costs $9 to sell it including all those costs including taxes. Also, by the way, income tax is not the only tax corporations pay. They also pay property taxes. All those taxes are included as expenses.

You can't take a series of events and prove anything. There is always something else going on at the time. It takes much more than a simple comparison.

 

Which reduced the dividends paid to me just like all other corporate expense which are not included in my dividend statement.

 

What the buyer sees is irrelevant.

Income tax is not a cost of production. That's a fact. Look it up if you want. You can't just point to other taxes which are costs of production and say, "Lookie here. A tax. Cost of production."

I have proven that raising the corporate tax rate does not cause inflation. It steers money from private investors into the government's hands. That's what it does. It has absolutely nothing to do with price, as the macroeconomic data proves.

Why are you plugging for corporations based on propaganda? Do you have a personal interest?

 

A reduction in income is not a cost. You can try to recoup that income in various ways. Raising prices isn't gonna work.

 

I haven't been talking about cost of production. I have been talking about total expenses for the firm. Pay attention.

Taxes reduce pre-tax income.

 

I'll save myself the energy. You are way over your head. Best of luck.

 

All businesses have expenses.

The problem here is that they're not profitable enough.

You'll find all the expenses detailed in financial statements - all publicly-traded companies must publish and make them available to shareholders. You should, in fact, receive them annually (at least) and/or can view them online.

 

A tax on corporate profits is by definition levied after expenses.

 

Actually I can. I prepare a spread sheet for my wife. She administers a trust between her and her two sisters for the farm which they inherited from their parents. Local property taxes are included as business expenses before the profit on the farm is calculated. The income is reduced by the amount of the property tax.

By the way, the farm is share cropped with a local farmer and the income to my wife and sisters does not amount to much.

 

ROTFL!