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In reply to the discussion: Graphic: Who Pays Taxes [View all]DirkGently
(12,151 posts)55. The U. of Chicago study concluding the same thing was by
"an economist."
Arnold Harberger, a conservative University of Chicago economist and colleague of Milton Friedman did a careful study of the incidence (distribution of the burden) of the corporate tax and found that it fell largely on corporate shareholders in the form of lower dividends and stock value. Other studies show some ratio of distribution between labor and management, but it almost never includes consumers of the corporation's output. Another free market economist, Bruce Bartlett (a former Reagan adviser), explains why;
"...most people assume that the corporate income tax is largely paid by consumers of its products or services. That is, they assume that although the tax is nominally levied on the corporation as a whole, in fact the burden of the tax is shifted onto customers in the form of higher prices. All economists reject that idea. They point out that prices are set by market forces and the suppliers of goods and services arent only C-corporations, which pay taxes on the corporate tax schedule, but also sole proprietorships, partnerships and S-corporations that are taxed under the individual income tax. Other suppliers include foreign corporations and nonprofits. Therefore, corporations cannot raise prices to compensate for the corporate income tax because they will be undercut by businesses to which the tax does not apply."
"...most people assume that the corporate income tax is largely paid by consumers of its products or services. That is, they assume that although the tax is nominally levied on the corporation as a whole, in fact the burden of the tax is shifted onto customers in the form of higher prices. All economists reject that idea. They point out that prices are set by market forces and the suppliers of goods and services arent only C-corporations, which pay taxes on the corporate tax schedule, but also sole proprietorships, partnerships and S-corporations that are taxed under the individual income tax. Other suppliers include foreign corporations and nonprofits. Therefore, corporations cannot raise prices to compensate for the corporate income tax because they will be undercut by businesses to which the tax does not apply."
http://www.dailykos.com/story/2014/5/8/1297707/-Do-Corporate-Income-Taxes-Really-Get-Passed-On-To-Consumers-Another-Conservative-Zombie-Myth
Your point about when profits may or may not be determined misses the point. It's a percentage of profits, not an inflexible cost that forces prices upward. Whether or not a company knows how much it will have to pay in taxes, it knows it can pay them.
The market sets prices, not corporate desires to make a certain amount after taxes. One company may want to "pass along" its tax costs, but the next may not need to. Again, there is no magic free market bullet that means corporations can somehow never pay more in taxes.
It's a fallacy. Pseudo-logic, just like tax cuts "paying for themselves" and higher minimum wages resulting in $12 hamburgers.
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It's cheaper and easier for the govt to police a few corporations instead of millions of Americans.
grahamhgreen
Dec 2015
#6
You'd like the people who get millions in salaries to get it tax free?
muriel_volestrangler
Dec 2015
#15
id rather have the corporations collect them cause then if i decide not to buy their product
saturnsring
Dec 2015
#5
if their tax rate was 20% and no one bought anythng they had to sell who would pay their 20%
saturnsring
Dec 2015
#13
That's not really correct. Companies generally don't keep prices "low" out of the goodness of their
MillennialDem
Dec 2015
#33
That only applies in a cartel or monopoly scenario, and in the cartel scenario it only
MillennialDem
Dec 2015
#37
Yeah it is but you're a true believer and no amount of evidence will change your view
MillennialDem
Dec 2015
#39
Nope. Corporations do not just "pass on" all the taxes they pay. They can't.
DirkGently
Dec 2015
#19
So you agree no economists think corporate taxes are "generally" passed on to consumers.
DirkGently
Dec 2015
#54
Economists establishing corporate taxes aren't passed to consumers was probably "the best."
DirkGently
Dec 2015
#73
I assume the material in this post was written by an academic "economist".
former9thward
Dec 2015
#51
If you look closely, you can just barely make out the system "fix" that Bill Clinton made
Bucky
Dec 2015
#4
I would agree to eliminating all corp. taxes in exchange for no corporate campaign contributions
Yavin4
Dec 2015
#26
Those "market forces" are working well for the corporations...for us, not so much...
Bigmack
Dec 2015
#64
They'll just whine that the $4,000 per year is letting them keep their own hard earned money - which
MillennialDem
Dec 2015
#35
Do the corporations get tax breaks for expense of lobbyists and politicians on the payroll?
Tierra_y_Libertad
Dec 2015
#46