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Old 04-12-2010, 03:51 PM   #41
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Look at the record capital gains taxes collected under the Bush tax cuts, and there's your answer............
I'd like to... got a link?
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Old 04-12-2010, 05:53 PM   #42
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Do corporations really 'pay' taxes or do they do nothing more than collect for the government. It has always seemed odd to me that people harp on corporations not paying their fair share. When was the last time Walmart gave you a 'Sales Tax Holiday'. You can bet if they did, they intend to make it up somewhere. Everyone knows the consumer pays sales tax, why do they believe Corporate Income Tax is any different. So if you are going to do a flat tax, don't tax corporations. It is just another hidden tax that politicians have been hiding behind for years!
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Old 04-12-2010, 08:04 PM   #43
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Do corporations really 'pay' taxes or do they do nothing more than collect for the government. It has always seemed odd to me that people harp on corporations not paying their fair share. When was the last time Walmart gave you a 'Sales Tax Holiday'. You can bet if they did, they intend to make it up somewhere. Everyone knows the consumer pays sales tax, why do they believe Corporate Income Tax is any different. So if you are going to do a flat tax, don't tax corporations. It is just another hidden tax that politicians have been hiding behind for years!
Either tax the coporations or tax the shareholders' dividends, not both. It makes no sense taxing the same income two times.
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Old 04-12-2010, 10:14 PM   #44
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My point is people pay taxes not business. If a business is going to continue it must take in enough to cover all expenses, and that includes taxes. When we allow the politicians to 'tax those big corporations and force them to pay their fair share' they in turn add it to their cost of doing business, and the people who use their goods and services pay. Mr. GE does not exist.
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Old 04-13-2010, 12:05 AM   #45
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Either tax the coporations or tax the shareholders' dividends, not both. It makes no sense taxing the same income two times.
It makes a lot of sense if you're the guy collecting the taxes
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Old 04-13-2010, 05:06 AM   #46
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It makes a lot of sense if you're the guy collecting the taxes
Good point.
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Old 04-13-2010, 10:51 AM   #47
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My point is people pay taxes not business. If a business is going to continue it must take in enough to cover all expenses, and that includes taxes. When we allow the politicians to 'tax those big corporations and force them to pay their fair share' they in turn add it to their cost of doing business, and the people who use their goods and services pay. Mr. GE does not exist.

Yes, business pays a part of the tax. It is hidden, but can be shown in economics... I have not done this since college, but will try and make it simple...

If you sell X for $1... you can sell a certain amount of them.. I will say 1,000...

Now, add a tax to it... a 20% tax... you try and sell them for $1.20.. but your sales drop by a big amount... say you sell only 500...

But, if you sell them for $1.10, your sales go up to 800... so you choose to sell them at $1.10... (I have not check the math to see if this is the right decision.. just putting this down as an example...).

You can now figure out that the price you are charging is $1.10 / 1.2 is about 92 cents... so you are paying part of the tax.... and have lower sales...
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Old 04-13-2010, 10:58 AM   #48
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I'd like to... got a link?
Government Taxes and Revenue Chart in United States 2000-2008 - Federal State Local
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Old 04-13-2010, 01:11 PM   #49
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Yes, business pays a part of the tax. It is hidden, but can be shown in economics... I have not done this since college, but will try and make it simple...

If you sell X for $1... you can sell a certain amount of them.. I will say 1,000...

Now, add a tax to it... a 20% tax... you try and sell them for $1.20.. but your sales drop by a big amount... say you sell only 500...

But, if you sell them for $1.10, your sales go up to 800... so you choose to sell them at $1.10... (I have not check the math to see if this is the right decision.. just putting this down as an example...).

You can now figure out that the price you are charging is $1.10 / 1.2 is about 92 cents... so you are paying part of the tax.... and have lower sales...
Tryin' ta follow ya here TP......

You're sayin' that if the demand curve for a product is elastic and the producer tries to add a cost increase (tax in this case) to the price (raise the price), total revenue will decrease. I get that. So the producer absorbs some of the cost to lower the price (defacto paying part of the tax) and increase volume until total revenue = total cost on the incremental unit sold, thus maximizing profit.

Is that it? If the product has an elastic demand curve, the producer will not be able to pass the tax on to the customer without reducing total revenue and likely profits?

I think you're on to something there TP.......
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Old 04-13-2010, 01:41 PM   #50
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Yes, but if he is not covering his cost plus return on investment, he will shut the business down. Over time with all producers of the product in question paying the same tax, they will all attempt to cover the total tax in their price. The degree of elasticity of the supply and demand curve has an effect on their ability to recover this tax cost just as it does all other cost. When a tax is first enacted, most normal elasticity curves would indicate that the producer would eat some of the tax, however, over time, the producer will have to cover this cost. Oh, I forgot, or get a massive bailout from the federal government. And don't even ask how the airlines stay in business.
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Old 04-13-2010, 01:44 PM   #51
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Kewl! Thanks. Yesterday, I spent some frustrating hours on the IRS site trying to tease out similar data.
Here is the chart you pointed me to, annotated with the relevant tax law changes. I included only federal individual and corporate taxes. I think this link will reproduce exactly what I am looking at:
Government Taxes and Revenue Chart in United States 1990-2008 - Federal State Local
tax.gif
and here is the same data, adjusted for constant 2008 dollars.
tax 2008 dollars.gif

I believe the above data is too confounded with the effects of the internet bubble and the housing bubble to allow a definitive statement about tax rates and revenue.

Here is some more info on these tax acts if anybody is interested:
Omnibus Budget Reconciliation Act of 1990 - Wikipedia, the free encyclopedia

Omnibus Budget Reconciliation Act of 1993 - Wikipedia, the free encyclopedia

Taxpayer Relief Act of 1997 - Wikipedia, the free encyclopedia

Economic Growth and Tax Relief Reconciliation Act of 2001 - Wikipedia, the free encyclopedia

Jobs and Growth Tax Relief Reconciliation Act of 2003 - Wikipedia, the free encyclopedia

Just for kicks and grins, here are the tax revenues as a percentage of the GDP
tax % GDP.gif

Originally, I thought it would be interesting to figure out how capital gains tax revenue changed as the marginal rates were lowered, but haven't been able to find the appropriate data yet.
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Old 04-13-2010, 02:14 PM   #52
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Since folks have been talking about corporate taxes lately, I though that I'd post this chart from the same website:
Government Taxes and Revenue Chart in United States 1950-2008 - Federal State Local
It shows the corporate income tax revenue as a percentage of the total income tax revenue since 1950.
corp tax %.gif

And again, apropos of nothing, here is the total FIT revenue as a percentage of the GDP since 1950.
1950 total revenue GDP.gif
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Old 04-13-2010, 03:36 PM   #53
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Tryin' ta follow ya here TP......

You're sayin' that if the demand curve for a product is elastic and the producer tries to add a cost increase (tax in this case) to the price (raise the price), total revenue will decrease. I get that. So the producer absorbs some of the cost to lower the price (defacto paying part of the tax) and increase volume until total revenue = total cost on the incremental unit sold, thus maximizing profit.

Is that it? If the product has an elastic demand curve, the producer will not be able to pass the tax on to the customer without reducing total revenue and likely profits?

I think you're on to something there TP.......

Heck, it has been WAY to long for me to remember the terms... but yes... this is what I was trying to get across...
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Old 04-13-2010, 11:46 PM   #54
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I believe it's been show a similar phenomenon goes on with the "employer paid" portion of social security and medicare. I agree a lot of (possibly) well intentioned efforts to have corporations pay their "fair share" has really led to hiding the true cost to those who really bear it, the individual employee/taxpayer.
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Old 04-14-2010, 08:21 AM   #55
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I believe it's been show a similar phenomenon goes on with the "employer paid" portion of social security and medicare. I agree a lot of (possibly) well intentioned efforts to have corporations pay their "fair share" has really led to hiding the true cost to those who really bear it, the individual employee/taxpayer.
What really get me is, it seems that most of the same people who would demand that we increase taxes on these 'big greedy corporations', are also totally in support of a 'progressive' FIT system. I'd love to see data on this, if anyone has a link to a survey or anything.

Yet, a corporate tax is a flat tax (regressive actually), as poorer people spend a higher % of their income on essentials, and corporate taxes affect all equally, as they are buried in the price of the product.

IME, if you question them on that paradox, they will scrunch up their face and change the subject. They have not thought it out. And yes, it bothers me that someone who has not thought out a position gets as much voting power as someone who has thought it out.

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