The big business tax myth

Discussion in 'Economy' started by spectrumc01, Apr 12, 2011.

  1. spectrumc01
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    spectrumc01 I give you....the TRUTH

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    I have heard this arguement every time someone mentions taxing big business, "If you tax big business all they do is pass the tax onto the consumer, so we really shouldn't tax them." This statement and variations of it, used to make sense until I actually thought about it.

    It seems to me that the consumer has X amount of money to put into the economy. It we raise taxes on them they have less money to put into the economy. So not taxing the consumer keeps more money flowing into the economy.

    If we tax big business, and they in turn raise their prices, we as consumers have a choice of weather or not to purchase their products. So the raising of prices due to taxation does not get passed on to the consumer because we have a choice of wether or not to patronize them.

    I myself would rather tax business and have a choice of where to shop than give business a pass and assume the tax. Good business will adapt and overcome, bad business will go bankrupt and disappear, but isn't that how capitalism is supposed to work? The strong survive and the weak die off.
     
  2. Quantum Windbag
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    Quantum Windbag Gold Member

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    Who said we shouldn't tax big business?

    I haven't seen much evidence of you thinking yet, why start now?

    You just proved you are not thinking.

    Taxes do not just go on one single business, they go on all of them, and we, as consumers, have to buy from somebody. The only way we can choose not to patronize them is if we simply stop buying anything. Believe it or not, that is actually worse for the economy than the alternative.
     
  3. Toronado3800
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    Toronado3800 VIP Member

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    The tax on big business should be well thought out. Just a plain earnings tax seems to chase them elsewhere now that we are in a global age for example. Tax things you dont want in your country higher, give tax breaks for good acts like tuition reimbursement programs.
     
  4. Wiseacre
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    Wiseacre Retired USAF Chief Supporting Member

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    Your logic is just a little fuzzy. If you raise the taxes on businesses there are 4 basic options for each business.

    1. Raise prices. If they are in competition with foreign companies, this hurts them. Or if they are a small company competing against large ones, the economies of scale hurt them too cuz the big guys can maybe not raise their prices as much as the small guys might have to.

    2. Cut costs somewhere else. Automate something, change the business model, reduce somebody's hours worked or lay people off and try to get by with fewer people. Or outsource something or even move your entire operation offshore.

    3. Eat the cost. For some maybe making $475,000 instead of $500,000 is no big deal. Depends on the situation though, in some cases they decide not to make the sacrifice.

    4. Go out of business. Maybe temporarily until the business climate improves in some way.


    There's a reason why nobody else around the world wants to have high business taxes. It drives existing businesses away and discourages new businesses from coming here. I don't think you end up with as much additional revenue as you might think and your economy generally takes a hit. I'd rather reduce or eliminate business taxes to stimulate the economy and create more jobs and increase consumer spending. Business tax revenue is only about a couple hundred billion/yr, I'm thinking we'd more than make up for that in personal income taxes and FICA taxes.
     
  5. Quantum Windbag
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    Quantum Windbag Gold Member

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    Taxes should only be used to raise revenue for the government, not to shape social policy.
     
  6. Toronado3800
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    Toronado3800 VIP Member

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    The fear of leaving too much money in the hands of businesses is they do less for the economy than a healthy middle class.

    Microsoft having a hundred million extra dollars means they will buy a yacht for the board room members and sue a small company out of existence.

    The middle class having a hundred million extra dollars sells six thousand Camry's. Damn Camry's. Well something that normal ppl need is the point. This creates demand. Demand is the vacuum businesses are drawn to.
     
  7. Toronado3800
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    Toronado3800 VIP Member

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    A difficult fight you will have removing them tax breaks for day care, education, IRA's and the like.

    I really think your view is idealistic. Somewhat of a Star Trek futuristic utopian view. If humans did not need taxes and police to keep them nudged towards doing what is right socialism would work. It doesn't. Regrettably human nature is what it is.

    Ideally I do agree with you Quantum but in practice I am too jaded.
     
  8. Quantum Windbag
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    Quantum Windbag Gold Member

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    Going back to the days when taxes were used to raise revenue is going forward in time?
     
  9. FireFly
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    FireFly Bright F**ker

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    We need to tax business, earnings, employees, stocks & dividends some. Most of their income is from overseas so it would not hit the consumer here as hard. BUT we must not tax higher than other countries or the business will leave this country. We must walk the tight-rope & get our fiscal house in order.
     
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  10. spectrumc01
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    spectrumc01 I give you....the TRUTH

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    Businesses are leaving, they are all ready outsourcing overseas, and their headquarters have been moving offshore to avoid taxes. GE paid no taxes on their earnings, Wall street has been giving bonuses left and right, and yet job growth is still almost stagnant. Business has a certain part of the population buffaloed into believeing that if they are taxed they will pick up and leave this country. If that is the way they feel then let them go, they obviously are not loyal to the United States or its belief system. Let's see if other governments are as quick to send in the military to protect them, while they rape and pillage third world economies. Everyone bitches about Europe being socialist and how turning into a socialist country would be bad for the US. If it is as bad as they say why would business move over seas in the first place? Unless....
     

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