Hear me out... Corporate Tax Increases are a coup-out vs taxing the wealthy.

[WarGamer]

This is going to take a few minutes here. Please read it all and wait to pass judgement.

Summary:

You're squeezing money out of the wrong people, primarily the consumer, the employee and the shareholder.

A link from Harvard Business Review for those who don't believe me:

https://hbr.org/2014/08/who-pays-corporate-taxes-possibly-you

Ok... in my own words.

So Apple taxes are going up... that means that rich bastard Mr. Apple will whip out his checkbook and write a big check to the US Treasury, right?

Oh wait. There IS NO Mr. Apple.

You see... Apple is a Corporation. That means that it's a business that is quite literally cut up into 16.7 Billion little pieces called SHARES.

Each of those shares is worth around $148 as of today.

But WHO owns those shares you ask... some rich bastard right?

Chairman of the board Art Levinson does indeed own 4.6 million shares of Apple. Tim Cook owns 830k shares. And the COO Jeff Williams owns 490k shares.

But wait, WG... you said Apple is split into 17 BILLION shares, right??

Well... Vanguard owns 1.3 BILLION shares of Apple.

Oh wow, Vanguard! Isn't that the same company that runs my company's 401k and investment accounts? Yes sir.

BlackRock, Berkshire Hathaway... etc

But wait, there's more. CALPRS the largest California State pension fund holds more than $4.5B of Apple stock. CALPRS pays the retirement benefits of retired firefighters, school teachers and cops...



So bottom line it. Who pays increased Corporate Taxes?

Remember how I said Art Levinson owned 4.5 million shares of Apple? Art doesn't give a shit if Apple's Corporate Tax Rate goes up. In fact, he PREFERS it compared to the alternative.

Corporations have a fiduciary responsibility to the shareholders. They will adjust their business plan and operations to maintain a level of profitability. 17 billion shares of the stock are relying on that value to be preserved and expect it to go UP.

Remember how Taiwan Semiconductors just announced a 10-20% increase in chip pricing? What will Apple do? Will they eat the price increase of the chips and reduce profitability? Or will they increase pricing on products or cut labor costs or reduce infrastructure costs?

One thing they sure as fuck WON'T do is eat the cost.

Corporate Taxes? It's just another business expense. No different than the cost of chips, Gorilla glass or Chinese labor.

There are 3 alternatives for Corporate tax increases:

1) Consumers pay more for products, aka consumers pay increased Corporate Taxation.

2) Apple reduces the workforce or cuts back salary to compensate, aka employees pay the tax.

3) Apple allows the profitability to drop, lowering the value, aka the stock price... hurting investors including school teachers and firefighters.

Back to Art Levinson...

He doesn't give a shit.

iPhone prices will go up, the cost of AppleTV will go up and maybe iCloud will become more expensive but HIS shares will continue to appreciate and he pays SHIT in taxes.

Corporate Taxation is a cowards move. We need to go and get the money where the money IS.

Wealth Tax, NOW. Per-Transaction Wall Street fees, tax all Capital gains as regular income, 50%+ top marginal rates, etc etc... you should NOT be able to make $50K in an afternoon on the golf course while the stock market is up and pay 15% tax rate...

What are politicians afraid of?

And making the $5M+/yr pay more taxes?? So the guy making $4M/yr is fairly taxed? Wtf????

[FoxNewsSucks]

1. We need all of that

[WarGamer]

2. thanks for reading, I appreciate it.

[ymetca]

3. 100% Agree

Who knew that "corporations are people too", right?

You tax PEOPLE, my friend. Especially the people who don't pay their taxes!

[WarGamer]

4. I'm infuriated, daily...

That people can see their net worth increase 50k, 200k, 500k in the time it takes to play golf because their investments appreciate in value at Wall and Broad and they're legally liable to pay only 15% tax on it.

The plumber works 50 hrs a week for a YEAR to make 100k and pays more taxes than the Yahoo on his Golf Cart. Fuck that.

[ymetca]

5. Exactly!

Gates, Buffet and Soros aren't any more our "friends" than Thiel, Koch, or any of the others. It's not their companies we should be after, but them - their unearned income.

As George Carlin said, "It's a a big club, and you ain't in it."

[WarGamer]

8. Yup, isn't that precious?

Technically the CEO of a big company that owns $2B in shares... lives in the Corporate condo and has a corporate expense account could pay ZERO in taxes if he accepts ZERO salary.

IIRC, Elon Musk takes a very small salary and pays very little taxes.

Our system is FUBAR.

[Zeitghost]

18. Corporate expense accounts and condos

Are taxable income. Just ask the Trump execs now under tax fraud investigation.

[WarGamer]

31. True.

Then the CEO can live in a motor home that he parks in the parking lot and pays $100/mo spot rental.

Bottom line, these people hoard money and don't pay taxes.

[madville]

6. Well written

I was posting about this recently as well. Increasing corporate taxes is essentially just a roundabout or masked sales tax on the product or service that eventually gets paid for by a consumer.

[WarGamer]

7. +1000 nt

[brooklynite]

9. I have a large number of Apple shares. I'll pay capital gains when I sell them.

I bought them at an effective price of.....65c, early on when I could see their potential.

As a side matter, I chose not to have children, which gave me approximately $500,000 more than most families. That money was invested. When I sell those shares, I'll pay capital gains taxes.

Now, I'm not opposed to raising tax rates on those who can afford to pay them; but I'm tired of this notion that wealth is always undeserved.

[WarGamer]

11. I hear ya... I just believe that income is income and it should all be taxed the same.

And is it really ok to hoard wealth?

Technically I can have a billion dollar portfolio but if I live at my parents house and eat their food... and drive Dad's Buick... I can pay ZERO taxes.

[Hassin Bin Sober]

12. Ahh yes, quite.

[Mr.Bill]

10. What are politicians afraid of?

Many of them are the people you want to go after. They don't work for us anymore. They are there to get rich.

[brooklynite]

13. Joe Biden doesn't support a wealth tax. You're saying he's there to get rich?

[Mr.Bill]

14. No, I did not say that about Joe Biden.

Joe Biden has accumulated a reasonable amount of wealth over a long period of time by honest means, mostly real estate investing and improvement. It's ironic that he's a more successful real estate investor than Trump, and I'd be willing to bet he's paid far more taxes than Trump.

[Demsrule86]

23. Joe Biden was the poorest Senator in the Senate. When his son became ill with cancer, he

was going to sell his house to pay for treatment. Pres. Obama stepped in and helped Joe Biden. Joe Biden accumulated wealth after his vice-presidency.

[secondwind]

15. Bookmarked. This opened my eyes!

[FreepFryer]

16. Whatever. From the start, Trumpists were THRILLED about his promise to reduce corporate tax rates.

It’s not an either/or.

Tax corporations - AND the rich people who profit most from them.

[Phoenix61]

17. And yet when corporate taxes were cut prices didn't go down

did they?
“Second, the dramatic corporate tax cuts of 2017 provided few benefits to the economy in general and to low- and middle-income households in particular;

Fourth, reducing the favorable tax treatment for offshore profits and investments, which the 2017 law largely did not do, would ensure that U.S. multinationals pay their fair share while positioning the United States as a leader in global tax negotiations.”

https://www.cbpp.org/research/federal-tax/corporate-rate-increase-would-make-taxes-fairer-help-fund-equitable-recovery

[WarGamer]

27. Because like I said...

Corporations have a fiduciary responsibility to shareholders. Corporation delivers a big fat return and the shareholders, retirees and employees are happy.

[ProfessorGAC]

32. A Canard

Not disagreeing with you personally, or anything you've written in the thread.
But, the "fiduciary responsibility" to shareholders is as big a copout as the taxing corporations issues you point out.
There is nothing in the definition of fiduciary responsibility that requires a guaranteed level of return to investors.
If taxes go up and a corporation's margin of earnings after taxes goes from 12% to 10%, there is no breach of fiduciary duty.
That canard is based on an outgrowth of the Chicago School's view of microeconomics & finance that took root in Ivy League b-schools in the 80s & 90s.
It's a convenient, and intellectually lazy, excuse for business people to be sharks with no concerns over the total stakeholders (employees, communities, the country's economy, etc.)
That makes me as angry as the tax thing does you.
Paying the taxes & accepting the lower margins without passing on all the costs to consumers or employees is not inconsistent with fiduciary duty.
Last note: when the executives drove Sears into the ditch over 20 years, nobody accused them of breaching their fiduciary duty. But, because all the stakeholders got slaughtered by their strategic stupidity, they kind of breached their fiduciary duty. Legally so? No. Practically so? Sure.
Fiduciary Duty only comes up as an obligation when it's convenient. Its a cheap dodge.

[WarGamer]

33. You're right...

I could have said the Corporations carry on as though they have a "Fiduciary Responsibility" to the shareholders.

Bottom line, in today's business climate... the Board that runs the Corporation will always steer strategy and tactics to maintain a profit.

I just can't imagine a meeting where the managers tell Tim Cook that the Taiwan Semiconductors price increases will raise the cost of an iPhone by $15 and Tim Cook saying "Well, we make enough profit anyway... we'll just eat it"

Mitt Romney really soiled the expression, but Corporations are... by definition and literally... people. Millions of shareholders and thousands of employees.

[ProfessorGAC]

34. Companies Actually Do That

Raw material prices go up, they hold the line on price for a while as good will. Yeah, eventually they raise prices but not the next week.
Then, they discount goods to large strategic customers. Keeping high volume customers happy is good business, and more important than this month's accounts receivable.
But, when it comes to taxes or workers' wages, "fiduciary duty" pops up.
Everything else is just business, but somehow taxes & compensation aren't!

[kcr]

19. I bet you thought trickle down economics made sense, too.

Tell me. Why should corporations get to use resources free and clear while the rest of us make up the loss? Also, ever heard of stock buybacks? I notice that term doesn't appear anywhere in your post. If you haven't heard of those, look that up. Then tell me why they shouldn't be paying taxes.

[WarGamer]

26. Of course not... why'd you say that? Irrelevant to my post.

[leftstreet]

20. DURec

[Demsrule86]

21. ATT, GM, Ford, and Amazon to name a few paid no taxes last year...none. And there are not enough

rich people to tax effectively...we can do both...make all pay their fair share.

[lagomorph777]

22. Yes - tax wealthy individuals at more appropriate rates, AND close the loopholes.

Loopholes (deductions) that apply only to rich folk need to be squeezed shut. That's really how they avoid paying their share today.

[Demsrule86]

24. I completely disagree with you. In a year that GM paid no taxes, they have eliminated and moved

thousands of jobs overseas. They give nothing back and need to pay their fair share. Ford shut down a plant in Cleveland, GM shut down Lordstown GM, and another will shut down within the year. And there are more.

[WarGamer]

25. What do you disagree with?

Can you disagree that the Sun sets in the West?

Let's take your example.

Bad GM. Tax the bastards.

Where does that money come from?

We've already been through this. If GM is forced to pay more taxes, they will:

1) Charge more for their vehicles. AKA consumers pay the tax.

2) Scale back salary increases, reduce workforce or close plants. AKA workers pay the tax.

3) GM investors will pay because the value of the stock will drop, hurting everyone from retirees and pensioners to fat cats.

At least admit that you think it's OK for consumers, employees and retirees to pay the Corporate taxes because that's the truth.

[fescuerescue]

29. GM probably isn't the best example

They have lots and lots of years where they lost money.

Not to mention that they actually did go bankrupt.

[Kingofalldems]

28. Tax both.

End of story.

[WarGamer]

30. I'm just trying to get people to acknowledge...

WHO is paying increased Corporate taxes?

As long as everyone understands that consumers, employees and shareholders (including retirees) are the ones paying... I'm OK with that.

But might as well just institute a nationwide VAT tax then...

[LanternWaste]

35. Have people denied their retirements are not affected (however fractionally small) by increases?

Have people denied their retirements are not affected (however fractionally small) by increases to the corporate tax rates?

Anyone of note?

Bueller?

Bueller?





(6 on d6, clear terrain, clear skies, DE. D is oh so E)

[WarGamer]

36. Still hoping the administration focus on the wealthy...

Wealthy PEOPLE need to pay more...

And because the RICH frequently have small TAXABLE INCOMES doesn't mean you can let them off the hook.

Don't forget...

Theoretically, if Elon Musk, net worth $200B received ZERO income for a year, didn't cash out any stock or options and lived off of money he put in his account last year...

He could pay ZERO taxes other than property tax, etc.

With a little work, like living in his parent's house... he could pay ZERO taxes whatsoever.