Capitalism does not work. Socialism is preferable. - Page 3 - Politics Forum.org | PoFo

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#14924911
One Degree wrote:I am not sure I am following you. Are you claiming the tax rate does not effect business decisions and does not require them to raise prices?
They just accept a lower after tax profit and do nothing different?
They don’t downsize, reduce capital investment, reduce employee benefits, etc.?
They sound more like saints than business people.

By effecting the accumulated reserves, it may effect these things indirectly. Hypothetically companies in a good credit position can always raise investment capital. Employee remuneration is also not a function of company profits, except in the case of profit-sharing provisions. Like everything else, remuneration is about profit maximizing calculations. Companies will pay what they can. There is some competition among companies in the labor market with respect to pay and benefits, but the determinants of what is the 'industry standard' in terms of pay are related to this competition and not to the company's profitability in a normal situation. Then there is supply/demand for labor, which is the principal determinant.
#14924955
One Degree wrote:
I am not sure I am following you. Are you claiming the tax rate does not effect business decisions and does not require them to raise prices?
They just accept a lower after tax profit and do nothing different?
They don’t downsize, reduce capital investment, reduce employee benefits, etc.?
They sound more like saints than business people.

I can't speak for Truth-to-power, but for me,
downsizing reduces profits; and
capital investment & employee benefits are both expenses and as such are not part of the profit being taxed.
I'm not saying that taxes on corporation profits don't effect their business decisions at all, but they don't effect their pricing decisions unless they are *not* charging the maximum the market will bare. If they are charging the max., then raising prices will reduce profits not increase them.
See my thread about a modified VAT tax system to make Corps. taxes be progressive.
#14925108
Downsizing does NOT reduce profits, it reduces COSTS and possibly also REVENUE. It is done to preserve profits actually in the face of some decline in market share or increasing costs.

Companies DON'T charge as much as the market will bear, they charge what they think will give optimal profits, which often times means a lower price than "what the market will bear". Think Walmart!

Seriously kids this is basic stuff, get it right!
#14925259
SolarCross wrote:Downsizing does NOT reduce profits, it reduces COSTS and possibly also REVENUE. It is done to preserve profits actually in the face of some decline in market share or increasing costs.

Companies DON'T charge as much as the market will bear, they charge what they think will give optimal profits, which often times means a lower price than "what the market will bear". Think Walmart!

Seriously kids this is basic stuff, get it right!

1st you redefine "what the market will bare", and then you insult me by calling me a 'kid'.

How can downsizing [assuming today's tax rates] not cut profits when the ONLY reason the company is doing it is to avoid paying taxes? That is, the comp. is not doing it because it can't sell all it can make. It can sell all it can make because I assumed the ONLY reason for it was to avoid taxes.
However, in my proposed tax structure; you are right, downsizing may increase after tax profits. However, I do not see that as bad for Americans. If Americans have money to spend then if a company reduces output then another company will start up to fill that demand. The whole point of my proposal is to have many companies competing for market share and totally block any trend toward mergers that reduce the number of companies competing for market share.
. . . Under my proposal, if after a merger the new larger company makes too much profit it will have to pay 90% of that 'excess profit' to the Gov. So, its after tax profit will not grow much. Its cost per item sold [including taxes] will increase. So, its market share should drop because it is now competing with comp. with lower per item costs.

Of course my proposal is radical. But it is less radical than socialism, right? Instead of taking all the productive property of the rich it just forces them to give it away to distant relatives or see the Gov. take it in taxes with the net worth tax.

Also, by indexing the tax brackets to the poverty income level [which is *firmly* (in the Constitution?) indexed to the UBI payment level and the minimum wage level] the system will keep the rich from ever increasing their part of the national income. This is because to reduce their tax payments they must get the rates reduced or raise the brackets. Under my system the top rates are set in concrete in the Constitution, so they only have the option of raising the brackets. But this will also raise the incomes of the poor [whether they are working or not].
. . . If the rich use their power to do that [raise the tax brackets by raising the UBI and minimum wage level], then (ISTM that) there is a chance that hyperinflation may set in. This is because that action both increases Gov. spending on UBI and decreases Gov. tax revenues which must increase the deficit [if we assume that the working poor pay little in income taxes]. IF the deficit is now *totally* massive [like 30%? of GDP] then hyperinflation is possible. But, would the rich gain from that hyperinflation? And, if they don't, then why would they push for that policy or continue it after the result became evident?
#14925535
Steve_American wrote:In other threads I have put forward my solution. Look for details there.

In general I proposed that taxes be made progressive again.
1] Top income bracket = 90% rate.
2] Corporations also have progressive brackets with the top 2 brackets being 45% and 90%. Yes, a huge jump to tax comp. that are "too big to fail" so they break themselves up to slash their tax rate.
3] An inheritance tax to keep a new aristocracy from developing.
4] A net worth tax with a 50% top rate for net worths over $500 million.
5] If corps. can't make too much profit they should pay their workers more so they can buy more so all companies can sell more.
6] After WWII I think the high tax rates encouraged investment because this reduced profits now, this might happen again.
Note I had to assume that some way could be found to keep corps. from using bookkeeping gimmicks to move a profit elsewhere.
Also the brackets are indexed to the poverty income line, i.e. some number like 500 times the pov. IL or 50 times it. If the poverty IL is increased then the brackets all go up. But, if the poverty income line goes up then the minimum wage goes up, the UBI goes up, and the wage paid in the "Employer of last resort program" goes up.

I like all those ideas!! I'd love to see them legislated, but the question keeps coming up "who is going to submit and pass such laws?"

To pass such tax laws would be to bite the hand that feeds. We have to always remember that the top corporations are essentially running the country via their bought politicians.
#14925647
Senter wrote:To pass such tax laws would be to bite the hand that feeds. We have to always remember that the top corporations are essentially running the country via their bought politicians.


Actually the politicians are shaking down the corporations. It's a protection racket and they are playing everybody.
#14925756
SolarCross wrote:Actually the politicians are shaking down the corporations. It's a protection racket and they are playing everybody.

Actually the economic base is the foundation of EVERYTHING. And therefore politics arises in service to the economic base. You will not find a politician in the House, Senate, or Presidency who ever called for an end to capitalism.
#14925757
Senter wrote:Actually the economic base is the foundation of EVERYTHING. And therefore politics arises in service to the economic base. You will not find a politician in the House, Senate, or Presidency who ever called for an end to capitalism.

You won't find a gangster calling for the end of shop keepers either. Nor will you find a shepherd calling for the end of sheep.
#14925769
One Degree wrote:I am not sure I am following you. Are you claiming the tax rate does not effect business decisions and does not require them to raise prices?

Right. Assuming firms try to maximize profits, the business analysis is not affected by a tax on profits.
They just accept a lower after tax profit and do nothing different?

Right. The difference is in the incentive for entrepreneurs and investors, not existing firms.
They don’t downsize, reduce capital investment, reduce employee benefits, etc.?

Right. Assuming they are made with the goal of maximizing profits, a tax on profits does not affect any of those decisions.
They sound more like saints than business people.

It's a question of understanding how business decisions are made. Because the tax is levied on profits, it doesn't affect the calculation of how to make the most profits.
#14925811
Senter wrote:I like all those ideas!! I'd love to see them legislated, but the question keeps coming up "who is going to submit and pass such laws?"

To pass such tax laws would be to bite the hand that feeds. We have to always remember that the top corporations are essentially running the country via their bought politicians.

As I already said up thread. The people will have to do it for the reason you gave.
As I said, chaos is coming. The people will have to vote out the people who are bought by the corps. and take control back from the corps.
Then they call a Constitutional Convention and do what they did in 1787.
They at least have to do 2 more things than I already listed.
1] Make the Constitution much easier to amend and
2] Provide a way for the people to make laws directly.

Personally I don't like it at all that now in several states it is possible for the people to amend the state constitution with just a 50.0001% vote. It needs to be at least 55%. And laws passed by the people directly should not be changed without a super majority for at least 4 or 6 years.

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