[negativez]

That's true - but taxes *always* disincentivize the thing being taxed. If investment in a company is less profitable under taxation than it otherwise would be, there will be less investment in that company, no exceptions. Now the size of that effect is quite likely to be negligible for the companies in question here. But it's at least theoretically possible that taxing corporate profits could lead to a change in the marketplace, including market dropout, that might actually lead to consumers paying higher prices to the remaining members of a market with reduced competition.

Further, if all companies in an already low-competition marketplace are equally affected by the tax, then it's quite possible for all of them to ~simultaneously raise prices to offset the tax, with or without explicitly illegal coordination, knowing that the others will follow suit.

[throwaway34241]

Sure, there are definitely second and third order effects. Taxing shareholders may reduce the incomes of wealthy people, who have a higher savings rate, leading to a reduced national savings rate, higher interest rates and lower asset prices, which could cause some businesses to decide against doing certain investments that wouldn't have a high enough return (relative to the interest rate on that capital).

Since everything is tied together it's hard to reason through all of this. For companies making investment decisions the interest rate will obviously be one factor, but projected consumer demand will be another, and it's easy to imagine in some cases higher middle-class incomes and consumer demand might be more important than a lower interest rate for decisions around building new factories etc.

Obviously it's complex and I don't have a strongly-held opinion. But taking a historical perspective interest rates are near record lows and financial asset prices are at record highs. On those grounds policies that might nudge us back a little into where the economy has been operating for the past 50 years (regarding interest rates etc) seem less risky than ones that push us further away from our post-WWII historical experience.