[lbo-talk] Corporate Taxes, was why Prince is right

Eric Beck ersatzdog at gmail.com
Sat Jul 10 09:01:59 PDT 2010


On Fri, Jul 9, 2010 at 8:21 PM, Shane Mage <shmage at pipeline.com> wrote:


> 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.

While maybe not disagreeing with your conclusion here, your logic seems to be wrong (of course I'm not sure how any of this works empirically, but that's never stopped me from pontificating before). Competition is not some bourgeois fiction perpetrated on the rest of us. All corps have to compete in the labor market, of course. Also, it's redundant and irrelevant to say they try to maximize profits; that's *the* driving force of capitalism. Many businesses, retailers for instance, are almost completely bounded by the vicissitudes of competition. Even quasi-monopolies like oil companies can't charge whatever they please, lest alternatives become financially viable.

Competition isn't a hoax. It's a real, structuring force.



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