"Jay Honeck" wrote in message
news:A2pWe.331656$x96.76629@attbi_s72...
But on the other hand, the shareholder is not usually also the worker.
Where corporations have millions of shareholders, a great many
shareholders may even be outside the country. Hence taxing corporate
profits before distribution, probably guarantees a better chance of
getting at the money before it leaves the country, whether it is going to
legitimate shareholders, into dodgy tax havens, or being siphoned
illegally by the executive.

That's nice, but irrelevant.

....snip...

Example: Here in Iowa City, there is a 5% state sales tax, and a 7%
hotel/motel tax, added to the price of every, single hotel room. When we
advertise our hotel, we sure don't quote the "with tax" rate (hell, *we*
don't get any of that money), but when you check in -- golly! -- your
$99.95 suite now costs $111.95!



That is exactly how it *is* "relevant". Your example has added 12USD of
taxes to the consumer. If that 12USD was not collected from the consumer,
the equivalent would have to be collected from the workers. You have
changed the distribution of the taxation load.

You may argue that is good place to shift the load, others may argue that is
bad.

Also, your example is strictly consumer taxation, not taxation on corporate
profit. Corporate taxes may or may not be passed down to the consumer. The
corporation's reduced after-tax profit may be offset instead by slower
expansion. Or, in a "competitive market", the corporation well may have to
reduce dividends to keep prices down and maintain market share. That's
where the big debate occurs....

And especially, corporate taxation addresses the issue of profits leaving
the country.

My whole point was not the right or wrong of how the balance should be
distributed between workers, consumers, shareholders, and corporate
expansion.

My point was that adding or reducing corporate taxes changes this balance
and is *not* a simple pass-through always to the consumer...as you suggested
in your original post. Instead, corporate taxation is a re-distribution of
the taxation load away from the worker.


And of course, as you suggest. it *isn't* simple. Governments have
interesting ways of "decreasing" (or "increasing") taxes for some sector,
whether labour, corporate, or consumer.... only to institute other
benefits/costs that may totally negate or even reverse that action.

So it may be interesting to see the actually amount of dollars which the
government gets from each of those 3 sectors, if reliable numbers could be
found, somewhere. One particular budget-analysis think tank, will have us
believe that the overall share of government revenue from corporations (in
2003) was lower than any year since 1930, except for 1983. And was 1/3
lower in 2003 than even 2000.

Again, we can argue that this is good, or this is bad, that is not the
point. But that share of government revenue has been shifted to somebody
else. *That* is the point. Corporate taxation re-distributes the tax
burden.