Post by opus on Oct 17, 2008 22:56:30 GMT -6
Corporations are not going to shoot themselves in the foot. If they jack up the price of those Chrysler cars, guess what? People are going to hang on to their clunkers for awhile. (As I have- I have three vehicles with over 100,000 miles on them. While my wife and I are making 6 figures collectively, we can't afford a new car right now. Thanks Mr. Bush) So the corporations will "play ball" and lower that price until it is reasonable.
The Reagan years saw tax cuts for the corporations, and inflation was ever-present, causing the economy to stagnate, hence the popular phrase "stagflation" of the time. Eventually the policies of cutting taxes for the rich led to a horrendous economy during the elder Bush's years that was the major reason for Clinton getting elected.
You make some sound arguments, no doubt, but the economy is not that simple. If that were the case, the bailout would have caused the stock market to start going up immediately. Instead, it saw two record losses AFTER the bailout. I personally feel comfortable knowing my taxes won't go up. It worked during the Clinton years. Besides, the policies of this Republican administration sure aren't working very well for our economy, are they.
In the 80's and early 90's we had 12 years of Republican leadership and ended up with a horrendous economy by 1992. Clinton turned it around. We've now had 8 consecutive years of Republican leadership and again our economy is tanking in almost record form. See the connection?
Inflation dropped from 13% to 4% under Reagan. "Stagflation' was a Carter phenomenon. Reagan fixed it. Fact check it if you doubt it.
You are still paying the same federal and state tax per gallon of gas as you were when it was $4 a gallon. If the feds raise that tax, you will pay more tax per gallon of gas. Tax is an expense and ultimately it has to be recouped from revenue- that which you pay. Yes, some companies may delay passing the expense on to you just as some companies delayed passing the transportation cost (expense) on to you when gas prices went up. But ultimately the expense is coming down the pipe to you. If passing the expense down causes revenue loss, companies cut jobs or benefits. Are we having fun yet?
Thats not an assumption. Thats economics 101.
A naive view of the incidence of the corporate tax is that shareholders bear the burden of the tax through lower after-tax rates of return. This naive view ignores the possibility that the
tax will be shifted onto consumers through higher prices, workers through lower wages (possibly due to a fall in capital accumulation), or other types of capital as capital shifts out of the corporate
sector in response to the lower after-tax return offered by corporations.
tax will be shifted onto consumers through higher prices, workers through lower wages (possibly due to a fall in capital accumulation), or other types of capital as capital shifts out of the corporate
sector in response to the lower after-tax return offered by corporations.
Translation: Its ultimately the consumer and the worker that bear the tax burden. Obama knows this.
www.treas.gov/offices/tax-policy/library/ota101.pdf
When Reagan took office in 1981, inflation was almost 14%. By the end of his first term it was less than 4%. The GDP rose at about 3.4% a year and almost 16 million jobs were created during the Reagan administration. Thats not "stagflation." Thats prosperity!
