A thought experiment that, likely, will never be put into the real world.

[redneckgaijin]

So, while the percentage of corporate profits paid as wages is currently THE LOWEST on record, bar none, corporate profits are just barely off their all-time highs and corporate tax payments, as a share of profits, are at the lowest since Nixon...

... this guy has a question that should be asked more often.

For now, we'll just ask a simple question of three companies—Walmart, McDonald's, and Starbucks.

How do you feel about paying your employees so little that most of them are poor?

. . .

Walmart, McDonald's, and Starbucks employ about 3 million people (not all Americans). They also collectively generate about $35 billion of operating profit per year. If the companies took, say, half of that operating profit and paid their employees an extra $5,000 apiece, it would make a big difference to the employees and the economy. The companies would still make boatloads of money, and the employees' compensation would finally be above the poverty line.

But of course that won't happen. After all, the Walton heirs jointly hold $52 billion dollars- that's six people with more money than the poorest 90,000,000 Americans combined- and still they need more, more, MORE...

Comments

[herlander_refugee]

I linked here from Blogger. Because yeah, I am so not "lovin' it" at all.

I think more Americans need to know the truth about corporations like these three infamous examples.

[lolotehe]

[kelbob.livejournal.com]

Consider, No corporation pays taxes. When you raise the corporate tax rate that money is passed on to the consumers in the pricing of the products.

[redneckgaijin.livejournal.com]

Bullshit. If that were true, then prices would have gone down with every big-business tax break and dodge. They haven't. Cut taxes, and the corporations and their major owners keep the dough for themselves. Raise taxes, and the corporations either take a smaller profit or find ways of making themselves less profitable, for example by paying workers more or investing in more marginal enterprises. Either way prices are guided by what the market is willing to pay- NOT by the tax rate.

[starcat-jewel.livejournal.com]

I disagree with part of that. Cut taxes, and they keep the dough for themselves, that's right. Raise taxes, and they raise prices to keep their share constant at our expense -- which I think is what kelbob is driving at. Prices only go down when they run a Really! Big! Sale!

My solution: remove ALL corporate tax loopholes except those for infrastructure improvement and creating jobs here in America; increase taxes for outsourcing labor and manufacturing. Give them an incentive to do the right thing, instead of pretending they'll do it out of the goodness of their hearts.

[redneckgaijin.livejournal.com]

The corporations would LIKE to raise prices to keep their post-tax wealth... but the problem with that is, if the market would permit them to raise their prices, why haven't they done it already?

No. Corporations are already charging the maximum they believe the market will stand for. Raise the price further, and rival corporations might undercut and steal market share, or customers might turn away- either way, more profit lost than gained. If corporate taxes go up (and eliminating loopholes IS a tax hike for anyone using those loopholes) they'll either have to pay up or find a way to evade the tax.

The easiest way to evade the tax is to buy Congress and get a subsidy or deduction- which is how we got where we are.

The second easiest way is to make an investment that looks like a business expense- financing a startup, giving employees a pay hike, etc.

This is how it worked for the thirty years or so after WW2. This is the primary redistributor of wealth- not the GI Bill, not Social Security, Medicare or Welfare, but the spectre of the top tax bracket encouraging the rich to not take the last slice of bread from the wrapper.