Tax rates don’t impact economic behavior. Leftwing shibboleth
George Rebane
Let’s start with an eternal truth, forever hidden from the lightly read and leftwing ‘economists’ – corporations don’t pay taxes, their customers do.’ Today SecTreas Yellen is Team Biden’s point on the easy job of convincing the G-7 countries to establish a globally applied minimum tax on corporations that do business across national borders. A 15% minimum on some line in a company’s income statement is being bandied about. The EU countries are ecstatic about the prospects of taxing American companies for revenues generated withing their borders. “The deal represents an intersection of Europeans’ longstanding dream to tax American tech companies and the Biden Administration’s attempt to bamboozle lawmakers into passing a competition-killing corporate-tax hike at home.”
But the whole idea for such a tax is a bad one from start to finish. (more here) Our anti-American Left sees it as a twofer – more revenues to support increased vote buying at home, and subrogating our Congress’ taxing powers to an international bureaucracy will take America another step away from sovereignty and toward a global government.
The bamboozle is particularly pernicious for the nation’s consumers, particularly those who are both ignorant and poor. For them the availability of needed goods and services will go down as their prices go up. And all this is happening as they cheer on their scumbag politicians for delivering another tranche of social justice in making the corporations pay their fair share of taxes. It’s actually a double tax on the corporations’ customers who then will have to pay higher prices and correspondingly higher sales taxes.
The international tax agreement, in whatever form it takes, will have a snowball’s chance in hell of getting through Congress. And what winds up getting through will be gamed to a fare-thee-well by the big corporatists. You can bet the farm that their margins and, therefore, share prices will not be impacted. What our socialists don’t understand is exactly how the corporations will game whatever new corporate tax policy is imposed here and abroad. (Readers recall a fundamental Rebane Doctrine tenet – The bad part of capitalism is that they will always game the system, the good part of capitalism is that they will always game the system. A corollary of this is that the corporatists have already gamed whatever change is planned for the system.)
Bottom line, don’t let any of this impact decisions on the disposition of equities in your portfolio.
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