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Are you proposing that eliminating corporate taxes would mean that somehow you would make more at the end of the day and be taxed less overall? I'm not sure I
by newman314 11y ago
Are you proposing that eliminating corporate taxes would mean that somehow you would make more at the end of the day and be taxed less overall?
I'm not sure I see that happening.
- harryh 11y agoIf you eliminate corporate taxes then the shareholders of the corporation would make more money(1). You can then make up for the lost corporate tax revenue by taxing those shareholders more. It would be a simpler and more efficient system overall. 1. Probably also the employees would make more and the customers would pay less for products as well. This has to do with something called tax incidence.
- newman314 11y agoThanks. I'll have to read more about tax incidence. But naively speaking, what's the incentive for a corporation to increase employee pay in this scenario rather than just maximize shareholder value?
- harryh 11y agoThe same incentive they have to pay you anything more than the minimum wage: the market. If there is more profit in the system how that profit gets allocated (higher wages, lower costs to customers, shareholder value) depends on the relative leverage of the various parties involved.