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Comment by jrexilius | Hacker News Reader

By that logic the poor in the US have the most power? As they pay generally close to zero direct taxes (indirectly they pay the corporate taxes and gas taxes and such as hidden costs in their daily consumption)...

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We are looking for policy concessions. Not taking money from someone who doesn't have money to take isn't much of a policy concession.

Also, as you point out, there are tons of indirect taxes on the poor, but other aspects of the policy status quo really drive it home -- poor social safety net, bad public transport, "public" schools funded with property tax, policies that make rent go up, shipping the jobs overseas, etc, etc. We even allow homeless spikes!

My general point isn't so much that taxes are an ideal metric, it's that we should focus on measuring the status quo rather than measuring who won yesterday's wedge issue battles.

How is not giving something to someone equivalent to taking something from someone?

They are not equivalent at all, they are almost exactly opposite. Each would reverse the other.

How is this distinction relevant to whether or not tallying wedge issues is sound methodology for identifying elites?

Perhaps? If not individually then collectively, whether as motivation toward a cheaper food supply, or as a caution to those who are not poor but only a couple of defiant decisions from losing what they've gained. It seems counterintuitive, but GPs rule of thumb may hold even there. I think the problem is in comparing a few wealthy individuals or cabals (in control) to an enormous number of real people (each without much control at all). Poverty is negative power under the same hierarchy responsible for controlling positive power.

>By that logic the poor in the US have the most power?

No:

https://www.nytimes.com/interactive/2019/10/06/opinion/incom...

>indirectly they pay the corporate taxes

Corporation tax incidence falls squarely on shareholders. Profit taxes affect those who are the beneficiary of profits, and the vast majority of the stock market is owned by the very, very wealthy.

It's not unusual for people to be spoon-fed the exact opposite impression, of course.

Costs of doing business get baked-in to the sale price.

Corporation tax isn’t a cost of doing business, it’s calculated after costs have been removed from revenue.

That seems to be a distinction without a difference, as they all are removed from net profits.

No, there is a huge difference. Your company passes on VAT, sales tax, the income tax needed to hire workers and other taxes.

The profits of the company are only relevant to investors, not consumers.

Because businesses forget every year what taxes are and don't factor them into the needed margins for a product?

That makes no sense. You set the price according to whatever gets you the highest profit. You then pay the tax on the profit. There is no room to adjust the margins of the product based on your profit expectations. By that logic my profit expectation could be 1 trillion and I just set the margin based on that since prices are infinitely elastic and the consumer will always pay whatever I charge. No, a competitor will steal your customers and you will end up making less money.

What the corporate income tax may do is encourage the company to defer its profits overseas and wait for tax holidays or tax cuts. It may also discourage investors from investing in your country. Those are pretty huge downsides but they have nothing to do with product pricing.

> Corporation tax isn’t a cost of doing business, it’s calculated after costs have been removed from revenue.

I think the point being made is that prices have to be adjusted to allow revenue to cover taxes along with other costs.

Heinlein had a scene in Beyond This Horizon (IIRC) where someone is explaining that profits are also an expense that have to be accounted for to the bewilderment of the other character who was insisting that profits are what's left over that you keep after expenses are deducted from revenue.

It's more complicated than that of course. For one thing supply and demand are usually elastic to some degree, substitutions can sometimes be made, concentrations of supply and/or demand can provide efficiencies of scale (which then results in rent-seeking) and technology is always throwing monkey wrenches into the gears to shake things up ala Christensen.

Anyway, that taxes are an expense for the individual economic entity such as a company isn't really debatable unless you want to make some sort of existential argument for arguments sake.

>I think the point being made is that prices have to be adjusted to allow revenue to cover taxes along with other costs.

Profits always cover corporation tax because corporation tax is a fraction of profit (of course it's more complicated than that in reality). But the essential point is if corporation tax is lower then there is more money to distribute to shareholders, if the tax is higher then there is less.

...except for all of the businesses that eat costs and post lower profits.

Profits also aren't a cost. They're a residual claim.

You are conflating corporate income tax on profits with all of the other taxes businesses pay. Those get passed through as cost of doing business and ultimately into the cost of goods sold. Regarding profit, you are also missing the point of profit objectives, which get tacked onto the cost of goods sold, because taxes aren't a surprise to businesses..

The vast majority of the stock market is owned by the very, very wealthy because they're very, very wealthy. It's a tautology. People don't need to be spoon-fed, because if they have any kind of savings, its probably exposed to the stock market.

The idea people get spoonfed is that shareholders wouldnt really care if corporation taxes were jacked up because prices would somehow go up to "compensate" for the tax on their profits. It's "the little guy who gets hurt instead".

Even though increasing corporation tax doesnt decrease supply or increase demand.

The poor would be paying more taxes if their income had tracked productivity gains and GDP growth. Instead it substantially went to the 0.5%.

Sales tax is highly regressive (in the technical sense) and makes up a larger fraction of the income of a poor person.

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