On Jul 9, 2010, at 7:36 PM, shag carpet bomb wrote:
>
> might be misremembering, but i thought it was Doug who made the
> argument that the tax burden just gets passed on...
That would be true *only* if there were perfect competition , so that every corp would have to increase prices to pay the interest on their capital and none can gain market share by raising prices less. In the "real world" corps are "imperfect" or "monopolistic" competitors-- ie., oligopolies. So they set their prices to maximize profits, which are the same prices whether the profit being maximized is pre-tax or post-tax. And an increase in corporate-profit tax does absolutely nothing to alter either the MC (marginal cost) or MR (marginal revenue) curve facing an oligopolistic firm. So standard economics *proves* that changes to corporate profits tax cannot be passed on in the "real world."
Shane Mage The communist creed: From each according to his ability, to each according to his need.
The capitalist creed: From each according to his gullibility, to each according to his greed.
Joe Stack (1956-2010)