[net.legal] Corporate income tax

dave@lsuc.UUCP (David Sherman) (03/01/85)

In article <683@whuxlm.UUCP> mag@whuxlm.UUCP (Mike Gray) writes:
||By the way, there's been a lot of criticism of corporate tax rates
||in this group.  What good does taxing corporations do?  They pay
||their taxes out of income, you know, which comes from the consumers
||who buy their products.  Individuals pay all the taxes in the end.

It's not that simple. "Corporations" include many businesses which
might or might not be incorporated - small businesses. If you
don't tax at the corporate level, you provide a large deferral
incentive to small businesses to incorporate to save tax. Less tax is
collected and unnecessary incorporations themselves cause wastage.

Dave Sherman
-- 
{utzoo pesnta nrcaero utcs hcr}!lsuc!dave
{allegra decvax ihnp4 linus}!utcsri!lsuc!dave

ems@amdahl.UUCP (ems) (03/05/85)

> By the way, there's been a lot of criticism of corporate tax rates
> in this group.  What good does taxing corporations do?  They pay
> their taxes out of income, you know, which comes from the consumers
> who buy their products.  Individuals pay all the taxes in the end.
> 
Not quite so.  Lets say that a coporation from a foreign country
comes here and mines silver.  They then sell some of the silver
to fund the operation and take the rest back to their home land
as 'profit'.  They are a socialist country and these funds go
into the national account.  Should they not pay a tax for the
privilege of taking our natural resource for their own use?
In this case a foreign government is the tax payer.

This argument can be generalized in several ways.  The first is to
say that the socialist government is in fact a set of stock holders.
In that case, the 'individuals' paying the tax are not citizens of
our country.  The next is to say that yes, the stock holders can
be anywhere in the world, even here.  This still shows the tax comming
from a (supposedly) more powerful group for the right to
exploit the national heratage or minerals.

The final generalization is to say that it is not silver, but
instead is a resource of some other kind.  Beach front property
in California, wharehouse space in New York.  Still, you are
taxing the entity (company == stockholders) for the use of their
share of public resources and facilities (police, fire, dirtying
the water and air) etc.

At this point you can see why many third world countries do not
greet the corporate world with open arms.  In we come to
monopolize the sources of wealth and export the gain to our
own shores. (In some of their eyes...)  While we talk of making
jobs and building industry.  In an international economy there is
a need for corporate taxation.  Even within our own borders, tax
on coporations can communicate to them the true costs to society
of their actions.  (You make the polution, you pay to clean it
up and figure the cost into your profit equations...)

E. Michael Smith  ...!{hplabs,ihnp4,amd,nsc}!amdahl!ems

Computo ergo sum

The opinions expressed by me are not representative of those of any
other person - natural, unnatural, or fictional - and only marginally
reflect my opinions as strained by the language.

doug@terak.UUCP (Doug Pardee) (03/06/85)

> By the way, there's been a lot of criticism of corporate tax rates
> in this group.  What good does taxing corporations do?  They pay
> their taxes out of income, you know, which comes from the consumers
> who buy their products.  Individuals pay all the taxes in the end.

While the above statement is absolutely correct, I support abolishment
of individual income tax in favor of business income tax.

The reason?  Businesses can afford to have tax lawyers go over their
returns.  Sure, they'll bill us individuals for it, but I think that
there are far fewer businesses than individuals, so my share of the
bill will be smaller than my bill for my own tax preparation.

Another reason?  The personal income tax laws in the U.S., at least,
are a tar-pit.  Once you have filed you must be around for the next
seven years in case of an audit.  And while you're around, you have
to file tax returns, and...     You can't legally just "chuck it all"
and run off to Tahiti and be a beach bum, or whatever.
-- 
Doug Pardee -- Terak Corp. -- !{hao,ihnp4,decvax}!noao!terak!doug

geoff@desint.UUCP (Geoff Kuenning) (03/11/85)

>> By the way, there's been a lot of criticism of corporate tax rates
>> in this group.  What good does taxing corporations do?  They pay
>> their taxes out of income, you know, which comes from the consumers
>> who buy their products.  Individuals pay all the taxes in the end.
>
>While the above statement is absolutely correct...

Doesn't anybody study economics any more?  A basic principle is that
business do *not* necessarily pass their costs on to the consumer.  Some
businesses can pass on more than their costs.  But most businesses, faced
with a 5% cost increase, find themselves only able to raise prices 4% without
losing money due to decreased demand.  Believe me, as a businessman I *know*.
-- 

	Geoff Kuenning
	Unix Consultant
	(213) 545-4413
	...!ihnp4!trwrb!desint!geoff

ndiamond@watdaisy.UUCP (Norman Diamond) (03/12/85)

> Doesn't anybody study economics any more?  A basic principle is that
> business do *not* necessarily pass their costs on to the consumer.  Some
> businesses can pass on more than their costs.  But most businesses, faced
> with a 5% cost increase, find themselves only able to raise prices 4% without
> losing money due to decreased demand.  Believe me, as a businessman I *know*.
> -- Geoff Kuenning

You mean, the immediate response can only be 4%, and the rest trickles through
later.
-- 

   Norman Diamond

UUCP:  {decvax|utzoo|ihnp4|allegra}!watmath!watdaisy!ndiamond
CSNET: ndiamond%watdaisy@waterloo.csnet
ARPA:  ndiamond%watdaisy%waterloo.csnet@csnet-relay.arpa

"Opinions are those of the keyboard, and do not reflect on me or higher-ups."

stewart@ihldt.UUCP (R. J. Stewart) (03/14/85)

>>> What good does taxing corporations do?  ...
>>> Individuals pay all the taxes in the end.

> Doesn't anybody study economics any more?  A basic principle is that
> business do *not* necessarily pass their costs on to the consumer.  Some
> businesses can pass on more than their costs.  But most businesses, faced
> with a 5% cost increase, find themselves only able to raise prices 4% without
> losing money due to decreased demand.  Believe me, as a businessman I *know*.

I claim that individuals *do* bear the taxes in the end.  Consider the
ways a business can support a tax:

1) Raise prices
2) Lower quality
3) Lower wages
4) Reduce owners' profit (or dividends, if a corporation)
5) Become more efficient

It seems to me that:

 - 1, 3, and 4 are clearly taxes on individuals, not businesses.
 - 2 is not substantially different from 1.  To get the same product
   (that is, of the same quality), you have to pay more.
 - 5 is not a way out.  The increase in efficiency could have been
   gained *without* the tax, so that one of the previous cases must
   apply.

If I've missed something, let me know.  I think this covers all the
bases, though.

Bob Stewart
ihldt!stewart