Head of Procter & Gamble blasts Obama tax proposal would cost American jobs & Higher Prices for consumers

You’ve convinced me that taxes should always be passed down the line to people who lack the influence to soak someone else. My state of Alabama is showing everyone else how it’s done: First you tax the income of every worker who makes as little as $12,000 in a year. (If they work in Birmingham, they also pay a tax to the county — unless they make six figures, in which case they’re tax-exempt.) Then you tax every penny they spend, even on groceries. Spending on services that the poor can’t afford (dry cleaning, lawyers, accountants) is tax-exempt. Just as it should be!

In Alabama we are zealous about this. As a consequence, when the economy weakens, state revenue promptly takes a dive, because it is pegged closely to cash-register transactions and paychecks, rather than stable assets like land. But it all works out, because then the state is simply unable to provide more than token relief to people who lose jobs and health insurance. We can pretend to care when we really don’t give a damn what happens to poor people. So those who can’t afford to leave the state will either sponge off middle-class relatives or turn to theft or violent crime. There’s no law like the law of the jungle!

Taxes are for little people. If you’re paying taxes, it means either you’re not rich enough to matter, or you’re rich and stupid — too stupid to figure out who to hire to shift that tax burden where it belongs. This is an ancient principle that keeps democracy in check: Peasants pay taxes. Castles are exempt. Corporations are modern-day castles. Deal with it.

Goodtimepolitics: It wasn’t I that said, it was in the News! And so maybe you should read this:
Obama Wants $190 Billion Tax Increase on Companies

Your products will sky rocket if this passes! Which congress isn’t to happy with I have been reading!

Thanks a lot large Corp who have moved away. I am happy to have made you what you are today to see you turn your back on me and my country.

The taxes are passed on to one stakeholder or another. It’s not ideology, it’s just accounting. Executive compensation is a small fraction of total costs across all corporations. If you think top-level plutocrats can absorb the whole corporate tax bill, you’re way off.

We’ve debunked the real-wages-in-decline-since-the-70′s myth already on this blog. We can do it again if need be. Only in certain sectors, accounting for a smaller and smaller fraction of total employment as time goes on, have real wages declined, and, even for them, most of the decline happened years ago.

As for locating plants overseas, capital follows low costs. If US firms were suddenly to move overseas manufacturing ops back home, they would still be undersold by whomever continuned to take advantage of the lower costs. A couple ways around this are 1) protective tariffs, effectively a subsidy to labor unions and a known recipe for lowering national income (see Great Depression), and 2) reducing other costs to domestic operations … like taxes.

There’s nothing wrong with following correct doctrine, but, so far, doctrine hasn’t entered into the discussion at all, that I can see. It’s been pretty straighforward economic reasoning, with some of us following the reasoning and others preferring not to.

I know it’s dogma that raising taxes always means corporations will raise prices, and like any increase in the cost of doing business, it does give them an incentive to do that. But in even a semi-competitive environment, there’s nothing automatic about passing costs along to the consumer. If you pass it along and your competitor doesn’t, then you lose.

Let’s look at your recommendations: Cut taxes and cut spending. Corporations will then pass their bounty along in the form of higher wages and employment.

In practice, though, we see them locating plants in cheap labor markets overseas and awarding benefits to executives, not workers (whose real income has been in decline since the 1970s). And this is exactly what we should expect them to do. They have no obligation to anyone but their own shareholders, right?

It’s fine to say we can’t tax and spend our way to a solution. But we can’t un-tax and un-spend our way to prosperity either. Political doctrine only gets you so far.