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by generic92034 956 days ago
> I hope they realise that every tax levied on a corporation will simply get passed on to the consumer eventually.

So it is impossible that the profit for owners/shareholders/etc. will sink instead of prices rising?

2 comments

Only temporarily. Over time investors will simply not invest if they aren't suitably compensated.
Well, wouldn't they have a hard time finding suitable markets, if about every large market adopts those taxes? The USA already has them. It is an OECD initiative.
Russia, China and almost the whole of African, Asian and Middle Eastern states are not OECD members. Most South American and Eastern European states are applicants. The corporations could try to sell their stuff and avoid this tax in the Middle Eastern states that are not under sanctions and possibly India and Pakistan. The rest are either under sanctions, export restrictions, too poor or too small to bother with or they'll have a hard time getting their profits out of.
Just speculating, but perhaps share prices would drop until the returns per dollar invested recovers to the desired level. So it might be like a one off shock to investors who hold shares now, since the new equilibrium has shares priced lower to get the same returns as before the tax.
If that's what you want, why not just tax the money when they take it out of the corporation, instead of while within it? If that company is spending 10 million on a factory, instead of taking out that 10 million to pay bonuses to Executives, you should encourage the former and discourage the latter. If you tax something you get less of it and if you subsidize something you get more of it.