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There is a cycle in a 'free' economy that runs in the long term, typically over decades. That cycle is in many senses, related to technical developments: Someth

There is a cycle in a 'free' economy that runs in the long term, typically over decades. That cycle is in many senses, related to technical developments: Something emerges that fundamentally changes the way we live and work (steam power, electricity, gasoline engines, mainframe computers, mini-computers, micro-computers, smart phones, ...). At each emergence, new enterprises are born and start an arc of relevance. Amplitudes and periods vary greatly, but companies like Sears & Roebuck have their days of high growth, maximum employment, then stagnation and decline as successor WalMart transpires through its cycle and takes the reins for a while. These companies pay varying amount of taxes, but can't get away from paying wages. Consider how many families are supported by MacDonald's or Bank of America. They contribute to society by employing people and enabling them to pay income taxes much more than their employers pay through corporate tax payments. Society gets into trouble when a pair of declining and ascending firms create a discontinuity for employees. If an employee of WalMart loses their position because WalMart has lost market share to Amazon, that employee is not likely able to move their employment to Amazon. Distribution centers are not in the same places as WalMart retail stores, and, the skills they need are not the same. Both are selling the same items to the same customers, but due to the different business models, the employees of one do not map onto the needs of the other and you have a discontinuity. On the one hand, Amazon is more efficient than WalMart and delivers more goods dollars for the same wage dollar (revenue per employee). So fewer workers are needed and there will be workers left unemployed or underemployed during the transition. On the other hand, Amazon should, over all, be therefore able to charge lower prices, benefiting all consumers. My point is that getting to the bottom of the question about how much and what type of value an enterprise delivers to society is a deeply complex question. Bloomberg's opinion seems superficial.

skybrian 7y ago
It seems like it would be hard to tell whether Amazon or WalMart are more efficient? They don't do quite the same thing.
chii 7y ago
> [corporations] contribute to society by employing people and enabling them to pay income taxes more than their employers pay through corporate tax payments. I can't let this point go undebated. The taxes paid by workers cannot be counted as the corporation's contribution to society, because this tax would've been paid regardless of the employer - it is a contribution from the worker to society. A corp that does not pay enough corp taxes is a corp that doesn't contribute. Providing employment is not a form of contribution, since the employment makes profit. Unless the corp employs people at a loss (in which case, it can be called a contribution - provided they do not reclaim tax credits to offset the cost).
- nearbuy 7y ago
  > The taxes paid by workers cannot be counted as the corporation's contribution to society, because this tax would've been paid regardless of the employer This only makes sense if you're assuming the total number jobs, salaries, or GDP can't change. If you decrease the number and/or size of businesses, income tax collected will absolutely go down. That's what happens in a recession. Whether you consider income tax to be a worker's contribution or their employer's contribution is a meaningless distinction. Any policy that attacks either side (causing fewer or lower paid workers, or fewer or worse paying employers) will reduce the amount of income tax collected.

skybrian 7y ago

It seems like it would be hard to tell whether Amazon or WalMart are more efficient? They don't do quite the same thing.

chii 7y ago

> [corporations] contribute to society by employing people and enabling them to pay income taxes more than their employers pay through corporate tax payments. I can't let this point go undebated. The taxes paid by workers cannot be counted as the corporation's contribution to society, because this tax would've been paid regardless of the employer - it is a contribution from the worker to society. A corp that does not pay enough corp taxes is a corp that doesn't contribute. Providing employment is not a form of contribution, since the employment makes profit. Unless the corp employs people at a loss (in which case, it can be called a contribution - provided they do not reclaim tax credits to offset the cost).

nearbuy 7y ago
> The taxes paid by workers cannot be counted as the corporation's contribution to society, because this tax would've been paid regardless of the employer This only makes sense if you're assuming the total number jobs, salaries, or GDP can't change. If you decrease the number and/or size of businesses, income tax collected will absolutely go down. That's what happens in a recession. Whether you consider income tax to be a worker's contribution or their employer's contribution is a meaningless distinction. Any policy that attacks either side (causing fewer or lower paid workers, or fewer or worse paying employers) will reduce the amount of income tax collected.