Found @ Samizdata
Nobody pretends that hiking these taxes means “ordinary people†will have less tax to pay. But most folk still believe that companies can be made to pay taxes, shifting the burden away from the rest of us. I have news for you: they can’t.
Corporations are artificial legal constructs: only people can ever pay taxes. The burden of taxes supposedly levied on companies is borne either by investors (through reduced returns on their capital), workers (via lower wages) or consumers (as a result of higher prices).
Targeting firms is just a way of stealthily taxing these people, ensuring nobody really understands who is picking up the bill.
Thank, government run school system. You have made generations of students so intelligent, they don’t know when they’re wrong.
If even just the 100 Level Economics course I took last year were made a requirement for high school graduation, we’d never have another Democrat elected to national office.
And if the two courses I’ve taken this year were also mandatory, we’d never have another Republican elected to national office either.
I know. Dream on, Phil
I had graduate level economics with a professor who served in several Administrations. The truth is more simple than that.
“The government drag on the economy is the net-present-value of expenditures minus transfer payments.”
In other words, every dollar the federal government spends makes up poorer. Whether the money is raised through taxation or debt is of only secondary consideration. We never had a revenue problem, we have had a spending problem since the Hoover Administration.
This is what they expect:
-the prices for widgets will remain the same
-the wages of those who build widgets will go up to a living wage
-taxes upon the widget will go up, and they will gladly be paid
-the companies making widgets will gladly earn less profits in order to pay higher taxes and higher wages.
The laws of economics and human nature say things work otherwise.
I came across and interesting blurb about taxes and government. Basically, the thesis is that the best way to shrink government is to raise taxes until there isn’t a deficit. Doing so will tell people the true cost of government. Because borrowing hides the true cost of spending, much like using a credit card hides the cost of a purchase, people will always demand MORE. By incurring ALL expenses NOW, there will be much less demand for more government.
Well it’s a good object lesson. Very much like the conceptual explanations that cut 8 or 9 or 354 zeros off the federal budget to explain them in “Family economics” terms. The thing is, the people who vote for the politicians who do these things don’t read about economics, don’t *care* about economics, and likely don’t care about politics either.
They will, however, notice the huge increase of taxes if someone were to institute such a policy, and would happily follow the media narrative without bothering to think about your relatively easy to understand synopsis. And whatever politicians passed such extreme tax increases would lose their jobs, if not their lives, to the mob.
So, to quote an old favorite… who is going to bell the cat?
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