
From https://www.aeaweb.org/articles?id=10.1257/jep.23.4.147
Celebrating humanity's flourishing through the spread of capitalism and the rule of law
17 Nov 2020 Leave a comment
in applied price theory, applied welfare economics, economic growth, entrepreneurship, macroeconomics, Marxist economics, public economics Tags: company tax, optimal tax theory, taxation and investment, taxation and savings
19 Dec 2017 Leave a comment
in fiscal policy, politics - New Zealand, politics - USA, public economics Tags: company tax
02 Dec 2016 Leave a comment
in applied price theory, economic growth, entrepreneurship, international economics, macroeconomics, politics - USA, public economics Tags: 2016 presidential election, company tax
02 Jun 2016 Leave a comment
in applied price theory, politics - Australia, politics - New Zealand, public economics Tags: Australia, company tax, international tax competition, tax incidents, taxation and entrepreneurship, taxation and investment
28 Apr 2016 Leave a comment
in public economics Tags: company tax, rational irrationality, tax incidence, taxation and entrepreneurship, taxation and investment
The tax incidence of sales taxes is understood by everybody but who pays company tax is stubbornly misunderstood. The seller is sending the tax cheque to the taxman does not fool anyone regarding who ultimately pays sales taxes.
Everyone expects that sales tax increases such as of the GST or VAT will be passed on to buyers but sometimes a little bit is absorbed in terms of lower profits by sellers if it is more than the market can bear.
When it comes to company taxes, this intuitive understanding of the economics of the incidence of taxes completely disappears. There is a strong belief that only investors pay the company tax in the form of dividends.
The notion that investors may reduce their investment and therefore the amount of capital with which workers can work is stoutly denied as is the implications for lower than otherwise wages because of this.
The possibility that the entire company tax may show up as lower wages when capital is internationally mobile is just not even contemplated. This is despite foreign direct investment being welcomed on the grounds that more capital means higher wages for local workers.
Likewise, when a factory is re-located offshore, it is understood that that will harm wages. That understanding does not carry through to company tax incidence when the factory relocates offshore because of low company taxes rather than import competition.
17 Apr 2016 Leave a comment
in applied price theory, entrepreneurship, fiscal policy, macroeconomics, politics - New Zealand, public economics Tags: company tax, Gareth Morgan, rational irrationality, taxation and entrepreneurship, taxation and investment, taxation and labour supply, taxation of capital income
The Morgan Foundation gave optimal tax theory a pass in yesterday’s publication about taxes on land and capital. Gareth Morgan is keen on a comprehensive capital tax.
Source: Taxing Wealth & Property – What Works? A Morgan Foundation Report.
This failure to refer to optimal tax theory is despite the Foundation’s strong commitment to evidence-based policy. Any discussion of tax policy that is evidence-based must refer optimal tax theory.
Source: Morgan Foundation, Public Policy Education.
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Celebrating humanity's flourishing through the spread of capitalism and the rule of law
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