A link in the daily newsletter I get from FEE (the Foundation for Economic Education) took me to Amazon's Twitter account and a post from Jeff Bezos saying that they want corporate taxes to go up and they support the Biden administration's efforts to raise taxes.
No, really.
Amazon has also lobbied aggressively for other big-government policies like a $15 federal minimum wage. This should strike you as a giant warning sign; it's something we've commented on this about a godzillion times in the life of this blog. When Big Business colludes with Big Government it’s virtually always because they know the government roadblocks instituted will reinforce their market dominance and ultimately be to that Big Business's benefit. After all, Big Business Amazon (in this case) already employs buildings full of accountants and lawyers to navigate the new laws. Smaller competitors don't. The expenses are harder on smaller businesses.
All big tech companies, Facebook, Amazon, Google, Twitter, Netflix; all of them got where they are by disrupting the existing business environment - puncturing the equilibrium. Because of that they all live in abject fear of being knocked out of dominance by another small, disruptive company. Cronyism with Big Government is a way they fight back. Why innovate when you can buy a congress critter?
It remains as valid now as it has been forever: ask someone if the people who pay the sales tax a company collects on what they sell are the same people who pay who the company's income tax. If they don't think they're the same group of people, the company's customers, they're economically illiterate. As this meme (also from FEE) points out, in conditions where the prices a company can charge can't go as high as the tax increase demands, studies have shown that the company's employees are subjected to conditions that get the rest of that revenue.
Let me let you in on not quite a secret: Amazon and Jeff Bezos know this. They just hope that you don't, and that you mistake their attempts at cronyism for altruism.
No, really.
Amazon has also lobbied aggressively for other big-government policies like a $15 federal minimum wage. This should strike you as a giant warning sign; it's something we've commented on this about a godzillion times in the life of this blog. When Big Business colludes with Big Government it’s virtually always because they know the government roadblocks instituted will reinforce their market dominance and ultimately be to that Big Business's benefit. After all, Big Business Amazon (in this case) already employs buildings full of accountants and lawyers to navigate the new laws. Smaller competitors don't. The expenses are harder on smaller businesses.
All big tech companies, Facebook, Amazon, Google, Twitter, Netflix; all of them got where they are by disrupting the existing business environment - puncturing the equilibrium. Because of that they all live in abject fear of being knocked out of dominance by another small, disruptive company. Cronyism with Big Government is a way they fight back. Why innovate when you can buy a congress critter?
It remains as valid now as it has been forever: ask someone if the people who pay the sales tax a company collects on what they sell are the same people who pay who the company's income tax. If they don't think they're the same group of people, the company's customers, they're economically illiterate. As this meme (also from FEE) points out, in conditions where the prices a company can charge can't go as high as the tax increase demands, studies have shown that the company's employees are subjected to conditions that get the rest of that revenue.
Let me let you in on not quite a secret: Amazon and Jeff Bezos know this. They just hope that you don't, and that you mistake their attempts at cronyism for altruism.
I haven't been fooled for years by this kind of stuff; I post here so I and others that do the same are not negligent but there are enough stupid people out there that will believe Amazon is being altruistic.
ReplyDeleteI figured it out a few years ago. Corporations, well, AMERICAN based, don't need to be taxed. They just charge more. Maybe tax exports?
ReplyDeleteTax the ones that have their production overseas?
Just remember you're taxing the customers, not the corporation. If you want to tax exports, you make the exported products more expensive and less attractive. That's guaranteed to reduce exports. If that's your goal, do it.
DeleteLikewise, if you want to make imports less attractive, tax the imports.
In an ideal world, there would be no tariffs. But a few years ago, we learned the Chinese were charging 25% tax on American cars going into China and the EU was charging 29% but we were charging 2.5% on their cars coming into the US. That's a relatively huge incentive to import foreign-made cars (which can be a brand thought to be American).
Prior to the Feb. 1913, and the ratification of the XVIth Amendment, the entire federal government leviathan was paid for with excise taxes and tariffs on imports, except during a brief stint during the Civil War.
DeleteCuriously, that put all the incentives on producing export products, and developing local industry, while putting homemade goods on equal footing with imports.
As there was no social welfare juggernaut to feed, the other incentive was wide open immigration, using immigrant hordes to drive labor prices ever lower, as the only easy way to lower production costs. In extreme cases, like the railroads, once the routes were built, the coolies were shipped back to China.
Government is ever on business' side, and business is never on your side, unless it happens coincidentally to align with their own interests.
Anyone, particularly Bezos, advocating higher taxes on business, should have all their business property seized in response, and forfeit to the government.
Anyone not in business advocating higher business taxes should have all their personal property seized in the same manner.
Anyone with no property whatsoever should be set to indentured servitude at hard labor, until such time as they agreed they had been worked enough (but in any event, not less than one full calendar year), or until they once again suggested higher business taxes.
One or two such examples would probably end the phenomenon for a century or two, if not in perpetuity.
Taxes are viewed as a business "expense". To keep the profit margin at an acceptable level, business will increase prices, or reduce quantity, or sometimes both if the bottom line needs a little bigger nudge. Most people these days, having never owned or even run a business, have no conception of how things work.
ReplyDeleteWhile I admire Bezos for his accomplishments, the real (rhetorical) question I have is: why do Amazon and Wal*Mart want to further destroy small business? Why are they afraid of competition?
ReplyDeleteAs SiG said, they are in fear of being knocked out of dominance by some upstart company. They are on top and want to ensure there is no other competition by somebody that has a better idea.
DeleteMaybe I'm naive, but I don't see Amazon and Walmart trying to destroy local small businesses. Not like the widespread talk of them putting local mom and pop shops out of business. The local shops are collateral damage in the fight between Walmart and Amazon. It's like the old joke about the danger to a mouse on the floor while elephants are fighting.
DeleteThe thing Amazon is afraid of here is some bright startup with a business plan nobody has thought of that wipes them out, much like Facebook replaced MySpace. There will be some sort of business concept that threatens them and this cronyism is a defense. Uber might well have wiped out the old-line taxi industry if not for their established cronyism with the local governments. I think Amazon is trying to be the equivalent of the taxi lobbyists who created all the hurdles that new taxi services have to jump to get into business.
"Maybe I'm naive, but I don't see Amazon and Walmart trying to destroy local small businesses."
DeleteWho are you, and what have you done with Silicon Graybeard??
FFS, destroying local small businesses is Walmart and Amazon's entire business model, since Day Zero of Ever. [√] Achievement unlocked.
In Step Two, they pick off national competitors. [√] Achievement unlocked.
In Step Three, they work on wiping out each other. [√] In progress.
That anything other than them yet survives is testimony mainly to the hard-headedness and resilience of the competition, and the sheer orneriness of some people who refuse to give them (and the third horseman of the retail apocalypse, Le Boutique Targét) every cent they spend.
The larger two sit on their shares of the retail gold hoard like a modern day Smaug inside of Mt. Doom, and their rapaciousness knows no bounds.
That's been their entire raison d'être since they opened up shop.
Phil, over at BustedKnuckles, proves GMTA in the same vein:
Deletehttps://bustednuckles.com/2021/04/08/american-economic-realities/
Basic rule of the game: the base of the pyramid supports everything above it. End User Pays.
ReplyDeleteThere really is no distinction between Big Business and Big Government. The denizens of these two parasitic groups move freely back and forth getting rich and passing legislation that serves THEIR agendas......getting richer and expanding their powers while doing all they can to enslave the rest of us. The system is corrupt and rotten to the very core. It simply CANNOT be fixed. We are going to have to tear it all down, exterminate the parasites and start over. If we don't the future for 99% of us is going to be nasty and for most either very limited or non-existent.
ReplyDelete