Posted by MikeT23 on 9/6/2011 7:36:00 PM (view original):
Sarcasm will get you nowhere if you want to have a serious discussion.
Businesses are in business to turn a profit. Agreed?
So, when someone or something affects the bottom line, what would a smart business do? I'll answer because, if you don't see it, I can't help you anyway. Find another way to get the profit margin back up. Agreed?
Does taxation affect the bottom line? Yes. Agreed?
So, with this info, what do you think a higher taxation rate would do? I'll give you a few options.
1. Send jobs overseas.
2. Increase cost to the consumer.
3. Lower wages/benefits to employees.
If you said "All of the above", you have correctly passed the test.
If you said "all of the above" then you have failed economics 101.
1.) If companies could charge higher prices, they would already be doing so (no company would leave profits on the table). Since increasing corporate tax rates has no impact whatsoever on what consumers are willing to pay, corporations paying higher taxes would not be able to increase revenue (or profits) by raising prices.
2.) If companies could reduce their wages/benefits, they would already be doing so (no company would leave profits on the table). Since increasing corporate tax rates has no impact whatsoever on what wages workers will accept in order to take a job, corporations paying higher taxes will not be able to reduce costs (or increase profits) by lowering wages or benefits.
No need to repeat the argument re: sending job overseas. It works exactly the same way.
In fact, there is no theoretical relationship, and more damningly no empirical relationship, between corporate tax rates and any of the things described in Mike23's post.