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Post by jgaffney on Jul 22, 2009 12:03:44 GMT -5
This is from The PeeDee: Do you think this could have anything to do with the fact that the California corporate tax rate is 8.84% and the Nevada corporate tax rate is 0.00%? Yet, the Democrats in the Legislature continue to claim that raising taxes is the solution to California's budget mess. |
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Post by capttankona on Jul 22, 2009 12:28:14 GMT -5
This is from The PeeDee: Do you think this could have anything to do with the fact that the California corporate tax rate is 8.84% and the Nevada corporate tax rate is 0.00%? Yet, the Democrats in the Legislature continue to claim that raising taxes is the solution to California's budget mess. Absolutely. You see, corporate taxes operate from the false premise that is the corporation that pays the tax. It does not take much of a brain to realize that this is false, corporations give money to the government that is called taxes, but that money comes from the consumer in the form of higher prices. If you want to remain competitive you move to a place with a lower or no corporate tax, taking the jobs with you. |
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Post by capttankona on Jul 22, 2009 12:29:48 GMT -5
Maybe one day Democrats will realize that beaches and sunny days are not good enough to keep businesses operating in this state. They are nice, but they do not help the overhead, do they.
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Post by subdjoe on Jul 22, 2009 13:14:48 GMT -5
[quote author=capttankona board=statepolitics thread=1650 post=18969 time=[/quote]
Absolutely. You see, corporate taxes operate from the false premise that is the corporation that pays the tax. It does not take much of a brain to realize that this is false, corporations give money to the government that is called taxes, but that money comes from the consumer in the form of higher prices. If you want to remain competitive you move to a place with a lower or no corporate tax, taking the jobs with you.[/quote]
The corporations pay the taxes through what amounts to an indirect tax on the consumer by increasing prices to pass along their cost of the tax. So, yes, the corporations pay the tax, but only by a levy on the consumer.
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Post by capttankona on Jul 22, 2009 15:58:33 GMT -5
That is correct, but slightly misstated.
First, when a corporation or a business creates a product the price point of the product must do two things, cover all expenses and provide a profit.
All businesses are following the same basic accounting principles, so Assests always equal the Liabilities plus Equity.
All liabilities include payroll, vendor costs, insurance, rent, utilities, payroll taxes, corporate taxes, etc.
So, when a consumer purchases one of the businesses products they pay the corporate tax, or at least the fractional portion that is attributed to each product unit produced. In essence, the corporation is merely an agent for the government who collects taxes from the consumer. They call it a corporate tax in government to hide the fact that it is actually paid by the consumer. So, in essence, corporations pay no corporate tax or taxes of any kind, even though they are liable for them.
Edited to add: This is the part that people like Mink and saunterelle fail to understand.
When you create a new tax, like a excessive profits tax, that tax will be passed onto the consumer in the form of higher prices. So, even though the government may see an increase in tax revenue, which is really their goal anyway rather then punishing the company they claim is making excessive profits, the consumer is the one that is hurt by the tax increase, not the corporation. Also, it damages the economic price point principles.
Take the gasoline tax for instance. Let us presume for some reason they have decided to remove all taxes assoicated with gasoline at the pump, which is technically a double dip tax, would removing the tax create a significant price drop? The answer is no. If the consumer will pay the price with the taxes included they will pay the same price even without the taxes. You may see a slight drop to give the impression that you are getting a better deal, but you would not regain the full 36.4 cents per gallon that is tacked on by the State and Federal Governments.
Then if a gasoline tax was added back down the road it would drive the prices even higher, because those corporations would increase the price to maintain their profit levels and blame the government for the price increase. And that, in a nut shell, is exactly how the government artifically increases prices.
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Post by The Big Dog on Jul 22, 2009 16:10:29 GMT -5
This isn't all about corporate taxes.
Basin Street has been Petaluma's biggest developer, for better or worse, for a long time now. The current and most recent councils have turned decidedly against Basin Street and are making it very much unfriendly for them. In that respect it's no surprise to me that they are bailing and I wonder why it took them so long.
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Post by capttankona on Jul 22, 2009 16:18:37 GMT -5
Your exactly right. It is about the cost of doing business in California, including the hostility of the local governments.
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