Lowering Tax Burden on an Industry

[PsychoSerenity]

The markets have us by the short and curlies!

Then we must get hold of theirs too. There's no point in letting them push us around (not beyond reasonable negotiation, anyway). It won't do us any favours in the long run.

[Rum]

The markets have us by the short and curlies!

Then we must get hold of theirs too. There's no point in letting them push us around (not beyond reasonable negotiation, anyway). It won't do us any favours in the long run.

What are you proposing we do about them?

[PsychoSerenity]

The markets have us by the short and curlies!

Then we must get hold of theirs too. There's no point in letting them push us around (not beyond reasonable negotiation, anyway). It won't do us any favours in the long run.

What are you proposing we do about them?

I don't no. It's a complicated situation in uncharted waters. I'm sure there are a number of solutions to be found. Giving up and completely bending to their will as they drag us down shouldn't be the first.

[Svartalf]

Destroy them
Close the stock market and legislate the hell out of fixing prices for shares on a supply/demand basis rather than from an honest assessment of the company's actual asset value and profit prospects.
In other terms, take the market out of the financial trends they have been in for far too long and encourage a production/employment based economy instead. Tax revenues on financial transactions prohibitively, so that by comparison payroll and actual corporate profit taxes will feel light... and massively encourage other countries to do the same... possibly sink the WTO if the financial markets just find friendly grounds to emigrate too and continue their evil manipulations from abroad.

[Pappa]

Given the floundering economy, should the tax burden on business and industry be lowered, so that it helps them succeed? Thereby also creating more jobs and economic opportunities?

Not on the whole, no. In many cases I think it needs to be significantly increased, - if tax adjustment is all you've got to work with to make improvements. By all means decrease it for new start-ups, genuinely productive industries (not just measured in how much money they pass around), and industries that can grow and employ more people.

But frankly I think it's time to move beyond old-fashioned solutions. Unemployment isn't high because businesses can't afford to employ people. It's high because they no longer need to employ people to still get record profits. Human labour is rapidly becoming irrelevant, and economies are becoming increasingly abstract, dealing with immaterial property. I think it's time for a whole new system.

I disagree. I think small businesses in particular are encouraged by lowering taxes. It enables them quite quickly to take on more staff as the need arises and be more flexible in general.

[Seabass]

Is there even a point to corporate taxation? If you crank up corporate tax rates, the corporations will have to make up the difference with higher prices and lower wages. Seems like a roundabout and inefficient way to tax the people.

But I suppose it makes the left-ish feel good, like we're sticking it to the man or something. What am I missing?

[Seth]

Destroy them
Close the stock market and legislate the hell out of fixing prices for shares on a supply/demand basis rather than from an honest assessment of the company's actual asset value and profit prospects.
In other terms, take the market out of the financial trends they have been in for far too long and encourage a production/employment based economy instead. Tax revenues on financial transactions prohibitively, so that by comparison payroll and actual corporate profit taxes will feel light... and massively encourage other countries to do the same... possibly sink the WTO if the financial markets just find friendly grounds to emigrate too and continue their evil manipulations from abroad.

Well, there's a great way to instantly destroy the economy of the entire planet and drive it into anarchic chaos and mass murder if ever I've heard one.

Nice going there Svarty!

[Seth]

Been tried and done, the owners lined their pockets, and did not lower prices or create jobs or anything they were supposed to do.

By Obama, yes...and then the companies went bankrupt, taking all that public money with them. Can you say "Solyndra?"

Get the government the FUCK out of the markets except as a policeman to monitor fraud.

[Robert_S]

There's a similar discussion going on here about the 50% tax band, where the richest people pay half of every pound at a given threshold.

The economic reality is that if they abolished it and 40% was the highest rate, the actual taxation net 'take' would be higher.

Labour however say it would 'send the wrong message' and the Lib Dems say they are 'not wedded' to the 50P tax rate.

If we need the revenue then bugger the message. People are perfectly capable of understanding some basic maths - those who are interested anyway.

Laffer Curve:

Neo-Laffer Curve:

[FBM]

Been tried and done, the owners lined their pockets, and did not lower prices or create jobs or anything they were supposed to do.

Wot? You don't have faith in the goodwill and generosity of billionaires towards the common sap citizen? After all, they got to be billionaires by being generous and mindful of the needs of those in lesser financial strata, didn't they?

[Svartalf]

All I have to say is that after restaurant owners cried and lobbied for a decade or two, Sarkoshyt munificently granted them a decrease in VAT rates from "normal" (19%) to "necessities" (5%), on the understanding that the money so lost by the treasury would be recouped by injecting it into the economy, through cutting prices accordingly (and thus leaving more spending money in the consumer's pocket, or through hiring more personnel.

Let's face it, the decrease in prices, where practiced, was pretty symbolic, and the job creations have been insignificant. It is guessed that money normally due the state has, again, been left in the pockets of those who need it the least.

[Robert_S]

Why are we expected to believe that any entity whose primary objective is to maximize profit will hire any more workers than necessary just because they have had their tax rates reduced?

[Pappa]

Why are we expected to believe that any entity whose primary objective is to maximize profit will hire any more workers than necessary just because they have had their tax rates reduced?

Because given the chance, most businesses like to expand.

[Robert_S]

Why are we expected to believe that any entity whose primary objective is to maximize profit will hire any more workers than necessary just because they have had their tax rates reduced?

Because given the chance, most businesses like to expand.

But we've seen stock markets do well while employment stagnates. I'm all for giving breaks to small businesses, but once they get big enough to hire a private army of lawyers and lobbyists...

[Seth]

There's a similar discussion going on here about the 50% tax band, where the richest people pay half of every pound at a given threshold.

The economic reality is that if they abolished it and 40% was the highest rate, the actual taxation net 'take' would be higher.

Labour however say it would 'send the wrong message' and the Lib Dems say they are 'not wedded' to the 50P tax rate.

If we need the revenue then bugger the message. People are perfectly capable of understanding some basic maths - those who are interested anyway.

Laffer Curve:

Neo-Laffer Curve:

It actually appears that the equilibrium point lies very near 19 percent of GDP. Over the last hundred years, irrespective of the marginal tax rate imposed by the government, which varied from 90 percent to 28 percent, actual revenues collected as a function of GDP equals 19 percent plus or minus over the entire period.

Therefore, every government should be limited to collecting no more than 19 percent of the prior year's GDP from all sources of revenue, and 19 percent of everyone's income, including everyone who HAS an income at all, sounds very fair and workable as a flat tax rate. Statutorily limiting the government to collecting only 19 percent of the previous year's GDP also encourages government to not only be frugal, but to work hard to increase the size of the GDP so it can collect more actual revenue the next year.