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Under a system of perfectly free commerce, each country naturally devotes its capital and labour to such employments as are most beneficial to each. This pursuit of individual advantage is admirably connected with the universal good of the whole. By stimulating industry, by regarding ingenuity, and by using most efficaciously the peculiar powers bestowed by nature, it distributes labour most effectively and most economically.
- David Ricardo
Putting high taxes and regulations (another form of tax) on companies make them leave. If you can't make profit because the government takes all or most of it, there is no reason to stay in business in such an environment. Far from being a balanced economy, what you get instead is a reduced economy. I suppose no economy anywhere is 'balanced' in a way, if you ignore the pain people feel from it.
Taxing companies would not be good for the economy due to them possibly begins able to invest more in the US economy if they would have a tax cut or decrease their spending.
Consider that you cannot tax a company. There's nothing to tax. Every penny that comes out of corporation tax comes from wages of workers in the company or decreased shareholder value.
@WilliamSchulz https://static1.squarespace.com/static/56eddde762cd9413e151ac92/t/56f7200545bf216ba3b89f69/1459036166023/CorpTax8.pdfHere's a policy paper from the Adam Smith institute on the topic. Let me clarify my point - one cannot tax a "corporation". It pays taxes, sure, but it's theoretically got no income whatever. One cannot directly tax the corporation. You can tax a human, because they pay tax under the law, and the incidence of tax fallse upon them. However, you cannot directly tax the corporation - consider if you were a CEO of a large firm, and corporation tax increased - in order to protect your own wage, you'd cut the wages of workers or slash dividends paid to stockholders to maintain your profit margin. In other words, the "burden" of the tax is falling upon the workers or the stockholders, not the company - it can't possibly, if it wants to maximise its profits (which it does).>. It has not been legal for corperations to take taxes out of workers wages,Doesn't happen in quite that way - simply that the corporation must maintain and maximise its profit margin and as such the "cuts" have to come from somewhere.> every company is like thisfor the purposes of macro and micro they pretty much are>the government can't tax corperations because taxing comes out of wagesIt's not quite that taxation of corporations comes out of wages - it's more that in order to maintain the profit margin companies must lower wages or good/service quality or raise prices or cut dividends.Let me provide you with a few papers that prove my claims.http://www.nber.org/papers/w0616.pdf>[corporation tax] is likely to be borne primarily by residents of the taxing state, as consumers, immobile workers, and owners of land and immobile capital.http://www.nber.org/papers/w8280.pdf>The incidence is typically borne by domestic capital, as in the original Harberger (1962) closed-economy model. Second, for those parameter values in which the incidence is not borne mostly by domestic capital, interestingly, most of the incidence is exported.http://www.nber.org/papers/w11686.pdf>1. For a variety of reasons, shareholders may bear a certain portion of the corporate tax burden. In the short run, they may be unable to shift taxes on corporate capital.
@Fascism Even so, in places in time such as Britain pre-Thatcher or France pre-Macron where unions were very strong wages were still sticky. In short, no.
@Fascism Labour unions tend to be extractive - they tend to not be representative, essentially of the workers in them. This means they "rent-seek" - they try and maximise their efficiency at the cost of social goods.