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Comment by fddrdplktrew | Hacker News Reader

corporate tax increases will just get passed on to consumers...

And mining taxes on power usage is just ridiculous... why don't you add an extra tax on gold used for jewelry too? and luxury cars, yachts, and anything that isn't really useful?

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> why don't you add an extra tax on gold used for jewelry too? and luxury cars, yachts, and anything that isn't really useful?

These are all really good ideas... Great comment!

Also, they are already taxing crypto transactions. (They are treated like stocks in the USA)

How about any private jet with a politician on board?

or https://mastodon.social/@elonjet

Then how about a luxury that you wouldn’t want to give up like eating meat, which is far more wasteful than eating plants directly? Or any of the other luxuries you take for granted?

The slippery slope has meat at the end!

Bitcoin and food. Totally comparable. Also, food is under way more regulation than crypto.

except that they don't enforce much rules when it comes to food. Two examples are fish and olive oil... you probably will never know if you got what you paid for... They just don't inspect. It's probably a bigger problem for fish, because you can get fish that taste about the same but is full of mercury or other toxins.

Yet another example where a supposed “gotcha” is simply a good idea.

There’s two sides to eating meat:

1: In many cases it’s actually not less efficient than eating a plant. If I eat some lamb or sheep in my area, they’re eating wild stuff growing in the hills and mountains. I’d like to see you try to eat what they’re eating, or grow anything we can eat there without destroying nature. In many cases cattle is raised on land not suited for growing food for human consumption, especially high quality protein. In many regions, you’d have no chance of getting local sustainable high quality proteins without meat or fish.

1.5: There’s also the aspect that raising animals is the only way to do sustainable, regenerative agriculture. How do sustainably fertilise your soil without them?

2: In the cases where meat is produced in an unsustainable way, it IS indeed a luxury that should be taxed. We shouldn’t cut down rainforest to grow soy for cattle feed or to make pastures for cattle for export.

Luxury taxes are a thing in China. I think we used to have something like that on cars in the states, but they disappeared at some time?

https://en.wikipedia.org/wiki/Luxury_tax#:~:text=United%20St....

10% from 1991 to 2002 it seems.

Taxing profits can't directly be passed on to consumers because the point of profit maximization remains unchanged. IE if a restaurant makes more money charging 25$ for a meal than 30$ then increasing prices simply reduces profits.

What gets passed on is things that increase costs for the industry like property taxes. If every landlord in the city pays an extra 50$ a month/unit in property taxes you bet rent's going up to compensate.

I don't think that's true in the medium term... definitely not in the long term... and maybe not even in the short term.

Your airtight logic astounds me.

thnaks

Think it though. If you could make more money long term while using cheaper ingredients or similar cost saving measure then what's to stop you from doing that without the tax increase?

Depending on the circumstances, that's a big "if". If your not-so-cheap ingredients are one of your restaurant's selling points (even if not explicitly), using cheaper ingredients could reduce your sales such that the savings turns out to be a wash, or a waste.

I think this happens all the time: it's not uncommon to see a restaurant review that goes something like, "I'd been coming here for years, but the quality of food has gone down recently". Granted, you don't know why: maybe they switched to cheaper ingredients, or maybe they got some new cooks that prepare things poorly (or even just differently), etc. But some type of cost-cutting measure could be to blame. And if that person -- and others (and perhaps potential new customers who see the recent bad reviews) -- stops visiting or visits less frequently, those cost-cutting measures may turn out to not have been worth it.

True in theory, but in practice the tax increase can act as a collusion signal for the entire industry to raise prices all at once.

Arguably food price inflation has been like this. Clearly the market can withstand it if everyone moves together.

All this is not to say that taxes should never be increased of course.

Taxing profits is similar (but not identical) to taxing all investment returns. From the company’s perspective, it reduces the value of domestic corporations to investors (thus advantaging foreign corporations). From the individual’s perspective, it reduces investment incomes (including those funding retirement accounts). In this way, it is passed on.

From another point of view, individuals (are supposed to) react to taxes by reducing 'luxury' spending, but businesses don't enjoy luxuries, only their investors do.

Taxing profits would be equivalent to taxing investment returns except foreign inverters don't pay US income taxes. It's therefore advantages for US taxpayers to Tax companies operating in the US.

Well, it depends: if the restaurant is able to keep the same number of meals per day with a price point of $30, then they still make more at $30 than at $25, even with a higher tax.

It's just you can't blanket assume that a particular price point is going to increase or decrease sales until you try it, so...

The example was presupposing a profit maximizing price. Of course businesses should optimize what they charge, but the incentives exist independent of minor changes to the US tax code.

> corporate tax increases will just get passed on to consumers...

Like how the corporate tax decreases in 2018 got passed on to consumers...right? Don't we all remember the big deflation in the past 6 years? And all that money was totally not used for stock buybacks and what not, right?

> why don't you add an extra tax on ... yachts

They tried that, back in November 1991.

https://en.wikipedia.org/wiki/Luxury_tax#United_States

It covered more than just yachts, but the biggest loser was the yacht industry, which saw sales plummet:

[quoting wikipedia]: The federal government estimated that it would raise $9 billion in excess revenues over the following five-year period. However, only two years after its imposition, in August 1993, at the behest of the luxury yacht industry, President Bill Clinton and Congress eliminated the "luxury tax" citing a loss in jobs.[6]

Atwood, Liz. "Boat dealers predict sales increase Luxury tax repeal helps ANNE ARUNDEL COUNTY BUSINESS". baltimoresun.com. Retrieved 23 August 2019.

[end wikipedia quote]

It turns out that luxuries are just that, luxuries, and the rich were more than willing to "do without" yet another yacht (or other luxury good) while the tax was on the books, and the tax never netted the "budget gains" its proponents predicted it would net, due to sales of all the taxed goods dropping off precipitously.

Isn't it still a win for the economy if the production that would have been wasted on yachts is instead invested to further increase productivity?

How is building yachts for people who demand it more wasteful than producing perfumes, collectibles or nicer lamps? Who gets to decide what is waste as long as there is demand?

In a democracy, ultimately the public should get to decide. Even if "taxing yachts" is not a win for the economy it might be a win for society. The USA is way too timid when it comes to using the tax code to incentivize and shape companies' and people's behavior. We really need to "re-internalize" the costs that big business and the rich externalize onto the public, and one way to do this is to impose very narrowly-directed taxes at things that the public bears but doesn't benefit from.

It’s not wasted in the slightest. That’s why it’s absolutely a loss.

A loss, felt in particular, by the many thousands of people employed in the vast supply chain which is the yacht building industry.

I’m not sure what you mean by production being “invested to further increase productivity” - seems like a non-sequitur.

This is the lump of labor fallacy in reverse isn't it? Those people would eventually be employed by other industries - both the labor and $ formerly going to yachts would be used somewhere else.

The “luxury car” label gets applied to anything that isn’t aggressively cost cut IMO. True excessive luxury cars do exist, but the label is basically meaningless at this point.

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