mck@ratex.UUCP (Daniel Kian Mc Kiernan) (03/27/85)
In responding to my point that taxing corporate income involves double taxation, sevener begins by noting: >This is an argument that is constantly reiterated by conservatives. (I don't move in Conservative circles, but I expect that we can take his word for it.) Perhaps they do so because the average person has yet to grasp this point, and because the typical Liberal evades it. In any event, it is heartening to see sevener address it head-on. Sevener raises an important point: The owners of corporations are given special priviledges under law. Sevener's argument is, in essence, that in exchange for these special priviledges, corporations should pay tax. There are 2 problems with this. First, the government forcibly limits the ways that businesses can be organized, which often compells the formation of a corporation when a somewhat different organization would be preferrable (it is hardly just to force people to pay extra in exchange for priviledges that they don't want!). Second, in cases where the priviledges are desired, the tax money goes to the State, rather than to those victimized by the priviledges (Example: the obligations of a fission power corporation, in the event of a catastrophe, are limited by law; corporate tax paid by such corporations is not disbursed amongst those compelled to absorb this risk). (Final note: In a Libertarian nation, corporations would not be able to limit obligations to 3rd parties by paying tax.) In response to my point that pension plans play an increasing role in the stock market, sevener notes: >Elderly people's pensions are generally calculated on a fixed rate. The problem here is that we are not confronted only with pension plan contracts established at some point in the past; new contracts are being generated all of the time. Taxing corporate income shifts the supply curve of pension plans to the detriment of the pension-receiver (in otherwords: some of the incidence of the tax falls on the elderly). Sevener suggests: >If you are worried about the elderly, I suggest aid be funneled directly. As a Libertarian, I am, of course, not worried about the elderly to the exclusion of my concern for liberty. Those who are not so concerned about liberty should note that subsidization of the elderly lowers the propensity to save and invest (this is an extremely important, yet often overlooked point). And sevener notes: >A[n elderly billionaire] hardly is in need of any tax breaks because of >his age. Ahh, but the problem here is that demagogues justify a higher net taxation (than would otherwise be approved) by the ploy of double taxation. Surely the democratic Mr sevener would want all the cards on the table before the public at the same time! Back later, DKMcK
mmt@dciem.UUCP (Martin Taylor) (03/28/85)
> In responding to my point that taxing corporate income involves double >taxation, sevener begins by noting: >>This is an argument that is constantly reiterated by conservatives. Well, of course taxing corporate income involves double taxation, since the taxed amount is mostly passed on to consumers in the form of raised prices. It is a regressive form of tax, since poor and rich pay the same proportion of the price. But then all taxation is multiple if you look at it from a suitable viewpoint. Income tax on the workers requires higher wages than would be necessary if the workers paid no income tax, and those higher waged are passed on as higher prices as well. Value-added tax is applied to every stage of production or service. It likewise is a regressive form of double taxation. I don't think you can get around the problem, and you certainly can't get around it by defining corporations as bad guys who should be heavily taxed (our NDP --socialist -- party won quite a few seats in an election a few years ago with the slogan "corporate welfare bums" in reference to low corporate taxes and bailouts). I usually agree with Severner's attempts to inject a little sense into this rather polemic group, but this time I think he is dead wrong, and DKMcK, with whom I generally disagree, is right. -- Martin Taylor {allegra,linus,ihnp4,floyd,ubc-vision}!utzoo!dciem!mmt {uw-beaver,qucis,watmath}!utcsri!dciem!mmt