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This is why corporate taxation is so important as well as the real solution to rising inflation. We have the additional factor that the banking sector may not

by jmyeet 4y ago

This is why corporate taxation is so important as well as the real solution to rising inflation. We have the additional factor that the banking sector may not be able to withstand further interest rate hikes due to bad risk management. Protecting the banking system is pretty much the only thing that could prompt lawmakers into action (eg a windfall profits tax) but these aren't ordinary times. But this will never happen. It's not even a partisan issue. Particularly since the awful "money = speech" decision [1], both sides of politics are bought and paid for by unchecked corporate power (eg [2]). Corporate consolidation makes this worse. Terms that might otherwise be illegal like "price gouging" and "price fixing" have been replaced by sanitized legal versions like "price leadership", which is basically the same thing. One company raises prices. The other follows suit. And for some reason corporate profiteering is fine but workers getting paid more isn't [3]. Weird. [1]: https://en.wikipedia.org/wiki/Citizens_United_v._FEC https://en.wikipedia.org/wiki/Citizens_United_v._FEC [2]: https://www.independent.co.uk/news/world/americas/us-politics/sinema-manchin-davos-filibuster-high-five-b2264713.html https://www.independent.co.uk/news/world/americas/us-politic... [3]: https://www.youtube.com/watch?v=tU3rGFyN5uQ https://www.youtube.com/watch?v=tU3rGFyN5uQ

unmole 4y ago
> This is why corporate taxation is so important as well as the real solution to rising inflation. How does corporate taxation reduce inflation?
- jmyeet 4y ago
  Because it creates an incentive to invest in the business. Maybe even higher wages (God forbid). Think of it this way: you can either do a $1 billion share buyback or invest $1.3 billion in the business. If we had a 75% profit tax then it would be $1 billion in buybacks or $4 billion in the business. Additionally, higher interest rates really benefit no one. Higher taxes fills government coffers and allows income distribution to those most in need. Lastly, interest rates are indiscriminate. They hurt every business and borrower. Taxes only impact profitable businesses to make them slightly less profitable.
  - unmole 4y ago
    > Because it creates an incentive to invest in the business. Why would investing in business reduce inflation in the general case? That would only be true if production capacity was at it's maximum and the demand is anticipated to remain high. > Maybe even higher wages Which will likely increase inflation further. > Higher taxes fills government coffers and allows income distribution to those most in need. Which will almost definitely further increase inflation. > Taxes only impact profitable businesses to make them slightly less profitable. Why is penalizing successful businesses a good idea?
    - jmyeet 4y ago
      > Which will likely increase inflation further. This is a myth perpetuated by people who simply want to suppress incomes to get slightly higher profits. It's the Tyranny of Austrian Economists combined with Reagan-era trickle-down economics and deregulation that have caused real wages to stagnate for 40 years. > Why is penalizing successful businesses a good idea? Why is a good idea that only people with incomes pay income taxes? Why is it a better idea that everyone pays taxes instead of only those who are profitable paying some of those profits in taxes?
      - unmole 4y ago
        > This is a myth Are you really claiming that more money chasing the same amount of goods isn't going to cause inflation? > Why is a good idea that only people with incomes pay income taxes? The context of the discussion was increasing taxes. And you did not explain the mechanism by which increasing corporate taxes is supposed to reduce inflation.

by jmyeet 4y ago

unmole 4y ago

> This is why corporate taxation is so important as well as the real solution to rising inflation. How does corporate taxation reduce inflation?

jmyeet 4y ago
Because it creates an incentive to invest in the business. Maybe even higher wages (God forbid). Think of it this way: you can either do a $1 billion share buyback or invest $1.3 billion in the business. If we had a 75% profit tax then it would be $1 billion in buybacks or $4 billion in the business. Additionally, higher interest rates really benefit no one. Higher taxes fills government coffers and allows income distribution to those most in need. Lastly, interest rates are indiscriminate. They hurt every business and borrower. Taxes only impact profitable businesses to make them slightly less profitable.
- unmole 4y ago
  > Because it creates an incentive to invest in the business. Why would investing in business reduce inflation in the general case? That would only be true if production capacity was at it's maximum and the demand is anticipated to remain high. > Maybe even higher wages Which will likely increase inflation further. > Higher taxes fills government coffers and allows income distribution to those most in need. Which will almost definitely further increase inflation. > Taxes only impact profitable businesses to make them slightly less profitable. Why is penalizing successful businesses a good idea?
  - jmyeet 4y ago
    > Which will likely increase inflation further. This is a myth perpetuated by people who simply want to suppress incomes to get slightly higher profits. It's the Tyranny of Austrian Economists combined with Reagan-era trickle-down economics and deregulation that have caused real wages to stagnate for 40 years. > Why is penalizing successful businesses a good idea? Why is a good idea that only people with incomes pay income taxes? Why is it a better idea that everyone pays taxes instead of only those who are profitable paying some of those profits in taxes?
    - unmole 4y ago
      > This is a myth Are you really claiming that more money chasing the same amount of goods isn't going to cause inflation? > Why is a good idea that only people with incomes pay income taxes? The context of the discussion was increasing taxes. And you did not explain the mechanism by which increasing corporate taxes is supposed to reduce inflation.