I thought the article made an interesting observation.

However, the trouble with trying to summarize economics in two paragraphs is that it necessarily simplifies things.

I'm not quite understanding your argument, Beep. How would, say, Microsoft (our favorite corp.) be hurt if they had to pay slightly more taxes? They seem to be doing well enough to have $23B in cash and short-term investments lying around: http://finance.yahoo.../bs?s=MSFT&annual

In contrast, IBM has less than $10B in the same category: http://finance.yahoo.com/q/bs?s=IBM

Apparently Microsoft is hanging on to its income to a much greater extent that IBM. I think it may be due to the fact that MS's prices often have little to do with their costs (e.g. consider how MS is willing to undercut Linux in the developing world).

If everything is a "zero sum", then how is economic growth possible? My understanding is that economies grow because people invest and work and, in effect, take deferred compensation with the hope of having a piece of a bigger pie at a later date. How does the pie get bigger if what goes in exactly equals what goes out?

In other words, elaborate please. :-)

I think the biggest problem with this argument is that it treats things as being static. If a company has to raise cash quickly, or clear out inventory quickly, or raise production quickly to prevent waste and take advantage of better prices on raw materials when purchased in bulk, or whatever, then they're going to consider a lot more than the tax. Companies will sometimes take a short-term loss, and sometimes grab an easy profit when they can. Of course taxes aren't always passed through. It's almost always the case that statements with "always" in them are wrong at least part of the time.

Remember that taxes are part of the cost of living in a civilized society. If companies that can afford to help pay for the cost of funding a civilized society don't do so to the extent that they should (and that extent is debatable, of course), then others who are less able to do so will have to make up the shortfall.

(An interesting history of federal individual and corporate income taxes is here: http://www.taxanalys...eum/1901-1932.htm The 20th century corporate income tax is older than the federal income tax, but their history is inextricably linked.)

Cheers,
Scott.