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From: mck@ratex.UUCP (Daniel Kian Mc Kiernan)
Newsgroups: net.politics
Subject: Corporate Taxation -- Reply to Sevener
Message-ID: <1000@ratex.UUCP>
Date: Tue, 26-Mar-85 16:07:09 EST
Article-I.D.: ratex.1000
Posted: Tue Mar 26 16:07:09 1985
Date-Received: Wed, 27-Mar-85 05:04:15 EST
Organization: Squids R Us
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     In responding to my point that taxing corporate income involves double
taxation, sevener begins by noting:
>This is an argument that is constantly reiterated by conservatives.
(I don't move in Conservative circles, but I expect that we can take his
word for it.)  Perhaps they do so because the average person has yet to
grasp this point, and because the typical Liberal evades it.  In any event,
it is heartening to see sevener address it head-on.
     Sevener raises an
important point: The owners of corporations are given special priviledges
under law.  Sevener's argument is, in essence, that in exchange for these
special priviledges, corporations should pay tax.  There are 2 problems
with this.  First, the government forcibly limits the ways that businesses
can be organized, which often compells the formation of a corporation when
a somewhat different organization would be preferrable (it is hardly just
to force people to pay extra in exchange for priviledges that
they don't want!).  Second, in cases where the priviledges are desired,
the tax money goes to the State, rather than to those victimized by the
priviledges (Example: the obligations of a fission power corporation, in
the event of a catastrophe, are limited by law; corporate tax paid by such
corporations is not disbursed amongst those compelled to absorb this risk).
(Final note: In a Libertarian nation, corporations would not be able to
limit obligations to 3rd parties by paying tax.)

     In response to my point that pension plans play an increasing role in
the stock market, sevener notes:
>Elderly people's pensions are generally calculated on a fixed rate.
The problem here is that we are not confronted only with pension plan
contracts established at some point in the past; new contracts are being
generated all of the time.  Taxing corporate income shifts the supply curve
of pension plans to the detriment of the pension-receiver (in otherwords:
some of the incidence of the tax falls on the elderly).
     Sevener suggests:
>If you are worried about the elderly, I suggest aid be funneled directly.
As a Libertarian, I am, of course, not worried about the elderly to the
exclusion of my concern for liberty.  Those who are not so concerned about
liberty should note that subsidization of the elderly lowers the propensity
to save and invest (this is an extremely important, yet often overlooked
point).
     And sevener notes:
>A[n elderly billionaire] hardly is in need of any tax breaks because of
>his age.
Ahh, but the problem here is that demagogues justify a higher net taxation
(than would otherwise be approved) by the ploy of double taxation.  Surely
the democratic Mr sevener would want all the cards on the table before the
public at the same time!

                                        Back later,
                                        DKMcK