on 2010-06-26 01:53 am (UTC)
adalger: Earthrise as seen from the moon, captured on camera by the crew of Apollo 16 (Default)
Posted by [personal profile] adalger
1. "Uh, folks? We're taxing really uber rich corporations. How is this bad?"

Keeping in mind I'm looking from an American perspective, I can still shed a little light on this.

As of 2008, just over 40% of adult Australians had stock ownership interests, either directly or indirectly (e.g., through a retirement plan). Corporations are owned entirely by their shareholders, meaning that "uber rich corporations" is a bit of a non-sequitur, as all that profit really is owned by the investors. In other words, "taxing really uber rich corporations" is just another way of saying "taking away people's retirement income."

On the other hand, 40% of Australian stocks are owned by foreigners. While it might seem to make sense to feel perfectly okay about taking the money back from them and keeping it in Australia, that has to be balanced against the positive impact of foreign investment on an economy.

In short, it's not so clear-cut as all that. The corporation is a legal device that allows a lot of people to pool together a lot of resources under the direction of a few leaders and use them profitably. When the corporation is profitable, it is those individual investors who profit.

One of the more fundamental truths in economics is that all taxes are paid by individuals. If you tax more profitable corporations more heavily, those taxes will be paid by either the corporation's owners (individual investors) or the corporation's customers, which could get murky, but will ultimately settle the taxes on some combination of owners of stock and/or buyers of retail goods.

These concepts aren't widely taught (in American schools, at least), and aren't exactly obvious or self-evident, so I would never fault anyone for not instinctively understanding them. There's even a lot of room for debate about what these things mean, and what the right answer is politically, so this answer really isn't "how this is bad," but "how this could reasonably be construed as bad by a reasonable person in good faith."

Wow, that got long. Economics is one of those subjects that fascinates me, so I tend to grow verbose when it comes up. Ima shu'up nao.
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jennifergearing

May 2011

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About Jen

A 20-something fat, queer woman of colour living in Australia.

Reading: Fond of speculative and YA fiction, social justice theory in various forms. Would love to see more rounded fat/queer/female/of colour (and multiples of the above) characters in fiction.

Writing: Sometimes blogs at Hoyden About Town, dabbles in fiction now and then, hoping to find her creativity again.

Watching: Fond of sci-fi/fantasy television, with a strange weakness for cop shows. Would love to see more rounded fat/queer/female/of colour (and multiples of the above) characters on television.