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I wonder why I dont get invited to parties anymore.
(lemmy.world)
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this post was submitted on 25 Mar 2024
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If we're being honest, corporations don't "pay" taxes at all, those costs are instead passed on to the consumer. They collect taxes from you, just like the government, they just hide it better.
Also the employees! Your employer and you split your taxes. If the company didn’t have to pay ~15%, they could theoretically increase your salary by that much. They wouldn’t, but they could.
You're right. Unless the only alternative for an employer is to raise wages or die, they won't.
And people don't pay taxes either, since they get money from companies to pay the taxes! Nobody actually pays taxes, it is the circle of money.
That is what you sound like.
Circle of money is incredibly important. People get money they spend it, improving their lives.
Goverment spend money building and maintaining infrastructure, and in normal countires education and healthcare.
Companies get money (pay less tax) they give most of it to shareholders to hoard. Who sits on a bigger and bigger pile of societys life blood, draining it to a lifeless husk. Parasites pure and simple.
You're closer to right than wrong.
Exactly. They just pass the cost onto consumers because there's no way they could reduce CEO pay.
But please ignore how stock buybacks and c-suite pay was way lower when corporate taxes were high. That's a silly correlation that has nothing to do with price inelasticity.
Reducing CEO pay is a logical fallacy. They will find a way to recoup those lost monies in another, harder to find and even harder to tax way, generally by reducing quality/ quantity of product, making cuts to workforce costs, or passing on costs to consumers in the form of increased prices. Altruism doesn't keep the lights on.
Hence the need for minimum wage.
Just because you have to play more layers of the game doesn't mean the game is impossible.
And the cost of raising the minimum wage kicks off the cycle of increasing costs, which in turn gets passed off onto the customer, or reduced compensation / hours for workers, or any number of other cost cutting measures. I'm not sticking up for them, just saying what will happen in that case. Sad, but true. They will always find a way to shift those costs or the company will likely eventually fail, in turn losing all those jobs, whether that's due to being priced out, major drops in investors, etc. It's a huge shit sandwich, and, unless you're at the top, we're all forced to take a bite.
It's not linear. Raising minimum wages by a dollar raises costs by less than a dollar because wages aren't 100% of costs.
....so lower income earners can get bumped up into a higher tax bracket?
Small employer, where they will actually feel this, sure. Might work. Might put them under too, but that doesn't matter since corporations do their best to crush the little guy. And for them, when you multiply that "just a dollar" by the number of hours worked, across all employees, and the bigger bumps that executives will then demand, that shows up as red on next year's ledger. And once again, hours get slashed, benefits get cut, jobs get lost to automation...
The ripple effects of taxing companies, increasing labor costs, and the costs of compliance and litigation, real or frivolous all wind up hurting the little guy. You seem to think a corporation will just take it and move along with their tail between their legs, but they don't. They always find a way around it, through all the things I've already stated. And throw in legal tax loopholes, lobbying and subsidies.
That's not how tax brackets work. You pay a higher rate only on the amount above the bracket. You don't pay a higher rate on the whole thing. You still end up making more money. Not understanding this should indicate to you that you really very much need to learn more on the topic.
The rest of your point is defeatist. You think corporations are some super powerful infinitely sneaky things. They are not. We have allowed them to become so through neglect. They can easily be reined back in. They were quite functional and much more heavily taxed in the 60s, and citizens were much better off. As a start we can just go back to that.
My point, while you could argue is defeatist, is realistic. You've clearly seen too many movies and TV shows where the little guy takes down the big, bad, evil corporation. There's too much money involved and too many politicians with their hands out.
To your first "point", any increase in the minimum wage will most definitely increase the amount it's earners pay, as it's a percentage, not a static amount, I assume you know how that works. As prices inevitably increase due to more cash chasing the same goods, the earning power of the wage increase actually decreases. This is known as "inflation". But I'm going to go ahead an d guess you know that too, but are either purposefully being disingenuous or truly have a pollyannish utopian view of how a Keynesian economy would actually work. While I realize I'm taking a bit of a leap, the way you're arguing that an across the board increase for entry level jobs while also placing crippling taxes on those who employ them would actually work, I think it's a pretty safe bet.
The cold, hard fact that we need to come to terms with is the United Sraes economic system is based on capitalism. The money involved is incomprehensible and the power it affords those who have it is even more so. So feel free, fight your fight, I wish you luck. I'll do my best to enjoy what happiness I'm able to find in the real world.
If we tax income then employees will just demand higher salaries! Don't tax income, just let corporations pay more tax without having to enrich their greedy employees even further. There's no point to income taxes, employers just end up paying for them anyway.
Companies charge for their products and services as much as they can get away with charging, quite independently of taxes - it's all about how much customers will pay, not about taxes.
The only taxea companies collect for the State are Sales Taxes.
Your view is the same delusion about how Markets works as the one were companies will raise salaries if they increase prices: no they won't, they charge as much as they can get away with and pay as little as they can get away with since what's in between the company owners (and upper management) get to keep.
This is basic Economics.
Pretty sure you're thinking I'm supporting the "companies". I'm not. Their sole purpose is to make money, be it for the ownership, board, or investors. Regardless of how you feel about that, it's "real world" economics. , Raising taxes on them comes with consequences, we need to be honest with the ripple effect it causes. The board, shareholders, ownership, etc isn't going to just "take it" and lower their own compensation. They will lower their costs to compensate, in the form of reducing hours, lowering quality of their product, raising prices on their product, lowering other compensation provided to employees, drastic cuts to their workforce, contracting workers, even famously "giving you less chips in a bag" for the same price. Companies will only willfully raise wages when the alternative is to be pushed out of lucrative markets.
Nothing about economics is "basic".
Profit is literally the top objective of a For Profit company and they will charge the maximum they can get away with independently of taxes because that maximizes profit.
If as per your theory a company charges X because it pays lower corporate taxes, and when the taxes it pays go up it starts charging X + Y, that means it could've been charging X + Y all along (as in that theory of yours people clearly are willing to pay it) but didn't, so logically it was not maximizing profits. which goes against the very objective of a company.
In financial and accounting terms corporate taxes are not costs (they apply to profits only and can never make a profitable company become unprofitable) and hence don't cause the same effect on prices as actual cost increases which can push prices up because they force all market participants to do so as otherwise they risk losing money.
Ditto on your whole lowering of costs "theory" - if a company can already lower costs and is not doing it, then it is literally refraining from maximizing profits, so going against its reason of being.
You assume a causal relation that isn't there because the driving motivation for any company is profit maximization and all those things you say they would start doing if taxes went up they have an obligation of doing it right now as that maximizes profits and if they're not doing it that's because they can't, and there is no logical explanation for not being able to do it now because their taxes are lower.
You're correct, there is nothing stopping them from lowering costs right now, aside from market competition. If prices on the exact same item are different between Target and Walmart, for example, the market trend is generally toward the retailer with the lowest price (excluding external factors such as time/distance, familiarity, etc). However, as taxes (or any realized cost of doing business, for that matter) goes up, the pressure from investors/shareholders goes up, necessitating these moves sooner than later.
Jacking up taxes or the cost of labor, materials, energy or compliance will be offset by things I've already stated ad nauseum. Business will do what it does and continue to grow wealth at the top and keep the rest of us as complacent as possible.