Taxing corporations

[flowerseverywhere]

As Rudy said “the truth is not the truth”

Last night I had a discussion with someone totally against taxing large corporations. He noted the money they dump into local and national coffers, through wages and commercial investments. On the other hand, I see more of a wage gap with large compensation at the top, with the bottom workers sometimes struggling to get by and having to rely on social programs like food stamps and Medicaid.
With the labor shortage, it looks like many businesses like McDonald's and Walmart for instance, have increased wages and benefits.

This is so complex I’m not sure what the benefit is of both sides of the spectrum of less or more taxation.

[GeorgeParker]

Higher taxes on corporations benefit the government, not workers. Period. In fact higher taxes on corporations can actually be used as an excuse to keep wages low because "the higher taxes are making it so difficult for us to remain profitable." Of course the cost of those higher taxes and any other increased expense always gets pushed downstream and ends up being paid by the lowest paid employees more than anyone else, simply because they're the ones who can't just leave and get a better job somewhere else. The top executives are more likely to give themselves a bonus for having saved the company so much money by keeping wages down and requiring more production per hour from every low level employee.

So the question isn't how higher taxes on corporations will affect the higher wages vs more jobs equation. The question is what the government will actually do with the extra revenue and is that going to benefit low level workers more than letting the corporations and stockholders keep the money.

[beckyliz]

Or, they could pay their workers more. That business expense reduced taxable income.

[GeorgeParker]

Or, they could pay their workers more. That business expense reduced taxable income.With all due respect. and I say that sincerely, you're living in a dream world.

Consider it logically. If I pay an employee an extra $10 a week and write it off as a business expense, how much do I reduce my company's income tax? Well, that depends on the tax rate, but let's be draconian and say my company pays 80% income tax on every extra dollar of profit. In that case I've paid the employee $10 and only reduced my company's income tax cost $8. IOW my company ends up with a net loss of $2. It would be a lot better, from my Machiavellian perspective, if I give myself a $10 raise, write it off as an expense so my company doesn't have to pay tax on it, and put the extra $10 in my own pocket instead of giving it to some low level employee. KWIM?

[bae]

Whenever they used to raise taxes on my enterprises, we just passed the cost onto the customers, and/or reduced the cost side of the business, often by reducing the size of the workforce. Generally not a dime came from the company in any practical sense.

[GeorgeParker]

Whenever they used to raise taxes on my enterprises, we just....reduced the cost side of the business, often by reducing the size of the workforce."Reducing the workforce" but still selling the same amount of product/service means all the employees who do the real productive work have to be more productive, which means they're doing more work per hour and not getting any extra pay for their extra effort. In effect that is a pay cut suffered by the people who can least afford it, plus the loss of income suffered by the people you fired. So you're right -- the company doesn't lose any money, only the people you fire and the people who have to work harder with no extra compensation get shafted by this marvelous solution.

(If I sound a little bitter, it's because I've been in that situation and had that done to me too many times in my life as a low level employee.)

[bae]

We mostly just invested in technology to
improve the efficiency of the remaining employees, or wholesale eliminated positions and less profitable product lines. Sometimes the remaining employees ended up earning more as a result. The ones who left got jobs at Microsoft messing up your life.