Thursday, October 8, 2015

Economics 101

National Review's Kevin D. Williamson, quoting Nobel Prize winning economist Milton Friedman, who said of trying to collect taxes from corporations:
Corporations aren’t taxpayers; corporations are tax-collectors.
Meaning, of course, they don't pay taxes out of profits, they treat them as operating costs to extract from others who have less market power - employees, suppliers, landlords, customers. Williamson notes the irony:
You know who doesn’t have a lot of market power? Poor people. People who make the minimum wage. Small businesses. Which is to say, all the people politicians always say they’re trying to help with regulations or a higher minimum wage or taxes on rich bastards and corporations — who don’t pay ’em.

Poor people bear these costs in obvious ways, such as higher prices or lower wages, but also in non-obvious ways, such as improvements in their standard of living that would have happened under different conditions but just never materialize. Low-income people have low incomes because people don’t value their labor very much and so aren’t willing to pay very much for it.
Williamson's conclusion is, let's say, pungent:
Who pays for all of that? Everybody. It’s a kind of inverted Marxism. It isn’t “From each according to his means,” it’s “From each according to how little power he has to pass the cost on to some other poor bastard.” There’s no such thing as “raising taxes, but only on the rich” or “passing regulations that only cost Big Business.” Everybody is always and forever on the same hook.
Those of us fortunate or talented or determined enough to have market power slough off our share onto the poor SOBs who have little or none. It was ever thus.