Tom wrote (see below):
If the same rate of tax is imposed on all appropriate businesses, they will
raise prices.
If a differential tax (some paying more than another) is imposed - they
can't raise prices (some conditions can change that general rule).
However, increased taxes are not paid by business, nor by the consumer -
but that's a more sophisticated analysis.
Keynes thought that monopolies don't matter - if they are taxed for their
illgotten gains. You are essentially saying the same thing.
I would say that if someone earned his $100 million in a free market
servicing consumers, he should pay no tax. (Libertarianism)
If he had a privilege that returned to him $100 million, he should be taxed
100% of his $100 million. (neo-Keynesianism)
Best, however, is not to give the lucrative privilege in the first place.
(Georgism)
But, that's too radical
Harry
--------------------------------------------------------
>HARRY: "Taxing high incomes is very hopeless. It would be better to
consider why
>they are high. Taxing profits merely passes those taxes through to the
>consumer."
>
>Well Harry, this bit of truism has stumped me for quite awhile but I think
>I have a rebuttal.
>
>The conventional neo-con wisdom is that if you tax my profits, then I have
>to raise my prices which makes the price of my goods and services higher
>which means that you can buy less. So, why don't you pay all the taxes and
>
>for my part of the bargain I will deliver the best and lowest priced
>products to
>you and because of my superior wisdom and entrepreneurial spirit, my
>benefit
>should be increased income because I am more productive.
>
>Well, if that is the Faustian bargain they offer, let me try a counter
>proposal. Let the prices rise, tax the profits and your income heavily or
>at least at the same level as mine. This will in effect lower my taxes
>giving me more disposable income. Now the difference is that with more
>disposable income, I have more choice as to which of the high priced goods
>you produce I might want to purchase and own/use.
>
>In my personal life, I have four kinds of income that come from my gross.
>
>1. The portion I owe the government for all the services it provides.
>
>2. Essential income - food to continue living, shelter and transportation.
>
>3. Disposable income, which is what I spend in the private sector for all
> the goods and services they provide.
>
>4. Savings and emergency income for when my car breaks down or I want to
> retire and not take up residence on the pavement at some future time.
>
>Now, if I pay out too much for one and two, then number three becomes less.
>Because it is less, there are many things I can't buy even though the
>price is low. If my share to the government was reduced by 10%, that money
>goes down to income number 3 and 4 where I am the one having choice. So,
>what I am saying is that I would rather have the choice of which high
>priced goods I buy, because I will have some money, rather than paying it
>in taxes so the neo-cons can work to produce lower priced goods which I
>can't afford anyway because in the hierarchy of income, I don't get a
>choice.
>
>Now, aside from all the other problems in the economic world, I would like
>to thank you for giving me a reason for writing this and putting it our for
>criticism and review.
>
>Respectfully
>
>
>Thomas Lunde
-------------------------------------------------------------
*****************************
Harry Pollard (818) 352-4141
Henry George School of Los Angeles
Box 655
Tujunga CA 91042
*****************************
