After The Dust: The Veiled Good News About Corporate Taxes



So, what about the Trump tax plan?
Isn’t it obvious that reducing corporate taxes is a sop to the rich?
Actually, no. Here’s why. The current top corporate tax bracket is 35%–among the highest in the world. Imagine a big company that makes jeans. The cost of labor and materials is, let’s say, $6.00. But the company expenses, including its tax burden, have to be added to that cost; otherwise the company would go under. Same with its regional distributors and wholesalers. Every step of the journey from the cutting room to retail store adds additional taxes, plus expenses, plus a profit margin. The result is that you pay $49.50 for a pair of six dollar jeans.
A simpler example: you rent your digs from a landlord. De Jure (by law), your landlord pays property tax. But de facto (in reality), the property tax is added to your rent. So here’s what you need to understand: Taxes flow downhill. Ergo, every tax is a consumer tax!
Once you grasp these facts, it’s obvious that when you reduce corporate taxes to, say, 21%, several good things occur. The least of which is you’re likely to pay a little less for the jeans. Yeah, the company might be stupid enough to pass its tax savings to shareholders. But doing so risks getting undersold by the competition. Plus, this kind of corporate idiocy is an advertisement for socialism.
A greater boon to the US economy results when our companies become more competitive in the world marketplace. Even if US firms build factories overseas, their profits from world trade eventually end up over here. And more foreign companies will invest in the US market. That’s more wealth coming into the US, and more money spent here. Jobs. Wealth. Boom City.

–R.A. Davis

6 thoughts on “After The Dust: The Veiled Good News About Corporate Taxes”

  1. Golly gee, Ms. Celia, it seems we have two wannabe Colin Kaepernicks ganging up on poor little me. Talk about teamwork! And the sheer profundity of statements like ” for the whitewashing of the hastening of bankrupting the U.S. Treasury” whatever that means. As if the Federal Reserve & its fiat money did not exist!

    Not a rebuttal of my logic, but rather an insulting attack on what I wrote, as if nothing that simple and plain-spoken could possibly have any merit. Finally, he addresses me as “mademoiselle.” And that explains the condescending tone perfectly, soesn’t it?

    Trolls should stay under bridges.

    1. If the well researched and exceptionally written words of Mr Powell detailing financial assault by the magic kingdom on its own staff who give it life was not enough of a rebuttal to your self-proclaimed “logic” cheer leading failed economic theory, allow me to ask…
      Did trickle-down economics work during the reagan years?
      Did “just say no”?
      If trickle-down economics works, why are there children working in sweatshops?
      If trickle-down economics worked, why are there sweatshops?

  2. Because yes, when men who achieve great power and wealth are presented opportunity for even greater wealth their first inclination is too be certain that others get a bit of it to improve their lives as well.

    1. “Disney CEO Bob Iger is one of those CEOs living in paycheck fantasyland, taking home $37.7 million [yearly]. He’s trying to buy 21st Century Fox Inc.’s entertainment assets for Disney. Even if he fails, he’ll get a $27 million bonus. That’s $27 million for a fiasco. It’s a guaranteed bonus of wonderland proportions.”

      “Disney has $37.7 million sitting around to give Iger, but charged its theme park workers for costumes. That meant 16,339 Disney Park Donald Ducks and Buzz Lightyears earned less than the federal minimum wage of $7.25 an hour, a violation of federal law. The U.S. Labor Department ordered Disney to repay $3.8 million.”

      “Looks like Disney tried to get solid gold Mouseketeer ears for Iger, out of the hides of its lowest-paid workers.”

      That’s typical of the sacred cow whose name is American Free Enterprise. The cow says, “Mmoo, mmoo, mmore freedom must be afforded to the lives and assets of the executives, and less freedom must be afforded to the lives and asses of the slaves who sustain the executives’ plantations with involuntary subjugation to dehumanizing captive’s wages.”

      Note: I don’t endorse all of the opinions and viewpoints presented in that article linked-to above. I’m a communitarian socialist, as are the fictional, yet often instructive New Testament characters Jesus, the first apostles (excluding Judas, of course) and the Holy Spirit. I believe in employee/worker ownership of the means of production, and equal sharing of the fruits of production. I do realize that that is a utopian, idealistic impossibility, in a world dominated by a species dominated by ideals absolutely and violently antithetical to the moralities, mercies, compassions, empathies and geo-necessities of the “spirituality” which welcomes, embraces, and sanctifies the discipleship which we commonly refer to as “equality”.

  3. Severely erroneous, uninformed, disinforming distortions.

    I know your intentions are good, R.A. Davis, but you’ve merely repeated many of the common falsehoods of trickle-down, tax-slashing, deficit/debt-dependent economics, in that little cheerleader’s chant for the whitewashing of the hastening of bankrupting the U.S. Treasury.

    I don’t blame you for your enthusiasm in cheering for such falsehoods. They do sound cheery, to the uninformed, misinformed, and disinformed.

    I don’t blame the uniformed, misinformed and disinformed, for wanting to hear, believe and repeat cheeriness.

    I haven’t got the time, here and now, to compose what would necessarily be a lengthy analysis and critique of the mythologies behind the bankrupting policies of trickle-down, tax-slashing, deficit/debt-dependent economic malpractice.

    Anyone can obtain many such analyses and critiques very easily, either in articles online, or within dozens of books.

    I know that my comments here are not sufficient as a rebuttal to your enthusiastic cheers, but I decided that I ought to at least take a knee, in protest against what is well known to be preposturously erroneous, casual brutalizing of the truth.

    Happy trails, mademoiselle.

    1. Agreeing with every word of his exceptional expression of Truth, Brother Strawberry will take a knee in solidarity of protest with Mr Powell.

      If trickle-down economics worked there would be no children working in sweatshops.
      If trickle down economics worked there would be no sweatshops.

      “I know that my comments here are not sufficient as a rebuttal to your enthusiastic cheers, but I decided that I ought to at least take a knee, in protest against what is well known to be preposturously erroneous, casual brutalizing of the truth.”
      Spoken like a man who lived through the reagan era.

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