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by hobs
2582 days ago
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It could be argued, if you completely ignore the poor generally dont hold shares in companies, and that this thought experiment only works if you think the workers could ever get a decent share of the company value, which rarely happens. |
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The real calculation is very complex and requires deep anaylsis, but let me try to give some concepts on what could happen.
A flat tax corporate tax to every company will have more effects on the consumers than anyone else: investors will invest less than they would have without the tax, as profits go down (and will consume more of their capital), and it will happen until the profits go back to the previous point of equilibrium. They have a 1 time loss, and then never lose profitability again.
If investors dont lose out in the long term, but the state gains through tax, you need to put that on workers or consumers. workers have one trick up their sleeve: they can go independent and avoid corporate tax: either as a small businesses, or being a contractor of some sort. So some workers will win and some will relatively lose.
But the one without much help is the consumer: he cant really buy things that don't go through a private business, which means everything they buy has the tax in it.
And thats a flat tax: its never flat. A local RE developer cannot avoid corporate taxes, but Google that opens offices somewhere else can. Or businesses that have huge potential (again tech) can avoid paying the tax by reinvesting in themselves for decades, which mom&pop shop cant, thus some companies pay more than others. In consequence, more investors go to the lower tax companies, workers will go to those companies and consumers will find their products cheaper.