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> Besides, liberated from corporate taxes, they'd have more freedom to increase wages. We've already played the trickle-down economics game. I don't recall it

• phkahler 10y ago
  Agreed. They would have the freedom to increase wages, but without any incentive to do so they won't. Instead they'll just increase dividends which are taxed at a lower rate than income. Hence the rich get richer. Simple.
  • witty_username 10y ago
    But non-rich people also invest in stocks. > They would have the freedom to increase wages, but without any incentive to do so they won't. Workers would go to the company with higher wages. And the company would be able to sustain higher wages as the tax is abolished.
    • 1_2__3 10y ago
      Not on any significant scale no. And trying to make the 99% buy into something by making that exact claim ("not only rich people own stocks") has been thoroughly debunked as propaganda. Yes, you are correct, but only academically. In practice the 99% benefit very little from the stock market while the 1% makes most of their money from it.
      • witty_username 10y ago
        Source for debunking? Many people indirectly purchase stocks through investments. For example, I might invest in a mutual fund which buys stock. Also, bonds and other instruments are linked to stock prices. So if stock prices go up, interest rates of bonds and debts go up too. Even if the 99% are not investing in stocks currently, they can in the future; so they can profit from corporate tax abolition.
        • phkahler 10y ago
          The key is to ask what portion of ones income is from investments. Or simply the ability to quit working and live on the investment income. For most of the middle class, their investments are hoped to fund their retirement, not any portion of their current lifestyle. That's why it doesn't matter that so much is in tax deferred retirement accounts.
          • witty_username 10y ago
            But it funds their current lifestyle indirectly as without investments one would have to cut down on expenses to save more for retirement. If tomorrow investments doubled money in a year, then people would work far less.
            • phkahler 10y ago
              So saving for the future "funds their current lifestyle"? I don't see a sarcasm tag on that.
              • witty_username 10y ago
                No sarcasm; I gave an explanation how that occurs indirectly in some sense. Essentially, with better investment earnings, you need to save less for retirement; which allows better current lifestyle. What would you do if investments doubled your money in a year?
    • deleted 10y ago
      [deleted]
    • banach 10y ago
      The point is that this policy disproportionately benefits rich people, who invest a lot more, and thus stand to gain a lot more.
      • witty_username 10y ago
        It is not disproportionate with respect to stock invested so non-rich people can invest in stocks. I do not see why rich people gaining disproportionately is a problem.
        • banach 10y ago
          > I do not see why rich people gaining disproportionately is a problem. You are free to have that opinion, but I think that the majority of the people affected by these economic policies (who by definition cannot be rich) will disagree with you. I think that the debate of policy would be greatly improved if proposals started with a statement of fundamental axioms like these, from which the supposed merits of policies are derived.
          • witty_username 10y ago
            > You are free to have that opinion, but I think that the majority of the people affected by these economic policies (who by definition cannot be rich) will disagree with you. Didn't you just say that rich people benefit? So the policy affects rich people positively.
            • banach 10y ago
              It does, but they are a minority.
• witty_username 10y ago
  The article fails to point out that if corporate tax rates are reduced wages and/or shareholder profits have to increase—the money must go somewhere. So, if wages are not increased, company will make more profit after taxes and thus shareholders will make more money.
  • nicky0 10y ago
    Or they just keep it in a cash pile like Apple.
    • bhickey 10y ago
      Apple's cash pile includes a lot of overseas holdings. There simply aren't enough things for them to spend $60bn on. They don't want to repatriate the money because they'd get hit with (wait for it) taxes. If we eliminated corporate taxes while raising capital gains taxes, Apple would have an incentive to repatriate the cash and the piper would still get paid.
  • nicky0 10y ago
    Or they just keep it in a cash pile like Apple.
  • forgottenpass 10y ago
    The article fails to point out that if corporate tax rates are reduced wages and/or shareholder revenues have to increase—the money must go somewhere. Of course they fail to point that out, because there is a strong counterfactual in the way many rich companies let cash sit in bank accounts for an indefinite amount of time.
    • witty_username 10y ago
      Perhaps your wording was metaphorical, but the cash does not sit in bank accounts. Apple is investing the cash pile in securities. (http://www.marketwatch.com/story/apple-isnt-really-sitting-on-216-billion-in-cash-2016-01-26 http://www.marketwatch.com/story/apple-isnt-really-sitting-o...) If corporate tax is abolished, Apple's cash pile would enlargen and thus Apple's investments would increase which would increase other company's stock prices or bond yields.