How is it different?
I could argue very effectively that we should eliminate the corporate federal income tax.
Reasons:
It is in fact an indirect tax borne by consumers and shareholders, not the corporations themselves.
Improve competitiveness and grow jobs in US vs overseas.
The recent corporate tax reform was a step in the right direction for competitiveness. But not sure how a tax which directly reduces cash available to stockholders is separate and unrelated.
Here, here!
.... You don't think if the corporate income tax were repealed, the corporate bigwigs would get fat pay raises and bonuses, instead of the consumers seeing lower prices? ...
This is the response I get from some people when discussing corporate taxes. Let me try my explanation on this crowd:
So you say if a Corp sees a tax savings, the savings will
not be passed onto the consumer? You probably would say, no, because the Corp is 'greedy'.
Well, I say they will pass the savings on to the consumer,
because they are 'greedy'.
Imagine 10 companies that make a commodity product. They sell their product to a distributor for $11, it costs them $10 all-in to make it. Fine 10% profit, all is well. That profit is in line with other products they make.
Then one day, one of the main components in that product sees a price drop, and all 10 companies can now produce the product for $9 instead of $10. They just doubled their profit from $1 to $2! Whoopie!
Well, I'm one of those 10, and I'm the greediest SOB you ever met. It takes me 10 seconds to realize that with that outsize profit, I should start pulling production from the other lines that only make 10% profit, and/or pay overtime, and/or expand, to make more of that high profit product.
But there is only so much demand. In the next 10 seconds, I call the distributor, and say " I can give you 2x the volume and I'll drop my price from $11.00 to $10.75. Well, the distributor likes this, so he takes me on, and starts reducing orders to the other nine companies. It doesn't take long before they catch on, and drop their prices to get back their volume, so being the greediest SOB of the bunch, I drop my price again. This will continue until everyone is back at making all their products at a 10% profit.
It didn't take a Government regulation, it didn't take anyone being 'nice'. Greed took care of it all. And the consumer benefits.
-ERD50