How America was Tricked on Tax Policy. Bret N. Bogenschneider. Читать онлайн. Newlib. NEWLIB.NET

Автор: Bret N. Bogenschneider
Издательство: Ingram
Серия:
Жанр произведения: Бухучет, налогообложение, аудит
Год издания: 0
isbn: 9781785274299
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#4. By inventing a special way to count taxes, we conclude the wealthy pay significant amounts of tax (e.g., the top 1 percent pay roughly half of all taxes).

      Deception #5. Statutory tax rates, not effective tax rates, are what’s important to tax policy.

      Deception #6. High business tax rates reduce economic growth by reducing the economic return on investment.

      Deception #7. The working poor don’t pay taxes because income tax rates are progressive.

      Deception #8. There are no social costs to high taxes on workers.

      Deception #9. Workers and poor people are cognitively inferior to the wealthy and unable to make rational economic decisions.

      Deception #10. Tax cuts for large corporations are the only viable tax policy option and never tax cuts for small business.

      Deception #11. Tax cuts for large corporations will reduce prices on consumer products.

      The following sections lay out why every one of these statements is a deception, a trick played on taxpayers to ensure that the wealthy and corporations don’t pay anything close to a proportionate share of the tax base.

       Deception #1. Tax cuts for the wealthy will cause economic growth

       Deception #2. Large corporations are experiencing a cash shortfall that can be alleviated by cutting their taxes

       Deception #3. Capital is like a delicate hummingbird: It is mobile and will leave if subjected to tax

      Many large corporations operate by harvesting profits by and through a dominant market position, where the business is operated like an annuity and the maximum amount of cash is drawn out from the operating business with the minimum amount of capital reinvestment. Such profit harvesting is best accomplished when the competition has been eliminated from the local market somehow. In economic terms, this market advantage is known as collecting economic “rents” out of the marketplace, and firms that engage in this are described as rent-seeking market behavior. One way to use tax policy to facilitate rent-seeking market behavior by large businesses is through granting preferential tax treatment to only large corporations. The benefits that the current tax system delivers to large corporations comes at the expense of small businesses in the marketplace by reducing the relative rate of economic return to these competitors. At one point, small businesses were competitors in the marketplace in various lines of business, but now are unable to make a profit after taking into account the relatively higher tax rates charged to small business in comparison to large business. Once the small businesses are out of the picture, the large corporations are positioned to provide a good or service in the absence of any competition and can charge whatever price they determine that consumers might be willing and able to pay.

      The term “rents” is helpful here because corporate activity can be thought of like a landlord who wishes to collect rents from tenants. A good example is a Walmart superstore that serves a locality and has no competing local stores. Just like landlords are unlikely to stop being landlords if there is still some rent to be collected—that is, profit to be made, without regard to the tax rate—corporations are the same. This Walmart will leave the locality only when its market position has been eroded in some way and that erosion has reduced available profits (or “rents”) to zero. This might occur if the Walmart is subjected to competition from another large grocery or retail chain, like Target or Kroger. Tax policy could have a negative impact on