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Response to former9thward (Reply #51)

Sat Dec 19, 2015, 08:20 PM

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 arenít 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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