On Jul 10, 2010, at 3:01 PM, Shane Mage wrote:
>
> On Jul 10, 2010, at 12:54 PM, Doug Henwood wrote:
>> ...a corp is really just a network of relationships organized towards the ultimate benefit [of] shareholders and top management, and not a person in any real economic sense...
>
> This is like saying that food is produced for the ultimate benefit of humans and tapeworms. The interests of shareholders and top management (leaving aside the few Black Swans like Buffet and Jobs) scarcely coincide.
Really? This is news to me. Maybe I should read the chapter on governance in Doug Henwood's book Wall Street!
>> ...The CBO assumes that corporate taxes are half paid by capital (in the form of hits to profits and dividends) and half by labor (in the form of lower wages), which is probably sensible.
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> What justifies this assumption? Certainly not any form of economic theory. Their reasoning might go like this: higher taxes on profits leave less profits for reinvestment--less reinvestment means less total investment means lower growth--lower growth means lower demand for labor power--lower demand for labor power means lower wages. Of course that reasoning leaves the *time* for completion of the process completely unaccounted for. Worse, it requires the assumption that higher government revenues are not reflected in higher public spending, even though the purpose of the tax is to finance public expenditure and public spending raises the aggregate demand for labor power. So the 50% figure seems quite arbitrary and scarcely sensible.
Any figure on something so hard to analyze properly is to some degree arbitrary, even something you come up with.
Doug