[lbo-talk] Kerry's Tax Cut Makes Me Wanna Ralph

[Yoshie Furuhashi]

Michael Perelman michael at ecst.csuchico.edu, Fri Apr 2 13:12:24 PST 2004:
>On Fri, Apr 02, 2004 at 12:58:07PM -0500, Doug Henwood wrote:
>>The business press is full of tales of how companies can't raise 
>>prices. The car industry, once the paradigmatic oligopoly, is 
>>facing  rising steel prices, but is unable to raise prices - in 
>>fact, 0%  financing and other sales incentives have been 
>>increasing. Despite  rising fuel prices, airlines have been unable 
>>to raise prices. Profit pressures in both industries are immense. 
>>It's not 1965 anymore,  despite this:
>
>Doesn't that suggest that corps. cannot pass on tax hikes?

Whether the corporate taxes are borne by workers (lower wages) or 
consumers (higher prices) or investors (lower dividends) cannot be 
theoretically decided in advance.  It all depends on which sector -- 
workers, consumers, or investors -- is best organized, can decrease 
elasticity, and has more power to stick it to the others.
-- 
Yoshie

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