From: mccall@mksol.dseg.ti.com (fred j mccall 575-3539)
Subject: Re: The end of the Reagan Era
Organization: Texas Instruments Inc
Distribution: usa,tx
Date: Sun, 15 Nov 1992 15:02:48 GMT

In <1992Nov13.035911.28659@midway.uchicago.edu> sug6@benedict.uchicago.edu (Patrick Sugent) writes:

>  Note that I never asserted this.  You are building a strawman (which,
>I admit is easier to destroy than what I actually said).  I never claimed
>that corporations pass taxes 100% through to the consumer (though,
>depending upon your theory, you could assert that).  I _did_ say that
>businesses collect taxes and "people pay them _in one way or another_".  
>Please read what I said more carefully since I'm not even sure we disagree.  

Uh, perhaps the problem is that you need to SAY what you said more
carefully?  I'm not building a strawman, a woodman, a tinman, an
ironman, or a steelman.  In general, when people assert what you did,
they mean that this occurs because the companies pass along those
added costs.  Just look at John Haugh, claiming that companies will
pass along MORE than those added costs to see what I mean.

Yes, you can assert that 'people pay them' in the sense that corporate
taxes come out of stockholder equity, but that's a pretty distant
relationship and just doesn't seem all that germane to the argument to
me. 

Note that using this reasoning, saying that companies "only collect
them [taxes]" isn't actually even quite accurate, since the
stockholders in a public company ARE the company -- and they are being
taxed on that company income (asset, etc.).

>  This statement is certainly true and not only fairly basic micro, but common 
>sense. I said this merely to point out that the government taxes on business 
>tax _someone_ and not a faceless money generator as politicians pretend to 
>believe.  Perhaps, I was somewhat unclear, but I suspect that you are 
>deliberately altering my view to suit your arguments.  I still wish you would 
>review some economic studies, but you seem unlikely to do so.

Why is it all these people want to foist off what they "suspect" on
me?  Hell, suspect what you please.  Perhaps the problem is that you
are responding from what you "suspect" instead of what is said?

>  Payroll taxes (such as the one proposed and FICA) have a very direct effect 
>on labor cost and therefore a very direct effect on jobs and wages.  Read
>some of the above studies.  One hopes that you don't believe that businesses
>hire without regard to labor cost.  If you do, read the issue of Policy
>Review and I think you will be enlightened.

Please show me where I *EVER* said anything even remotely resembling
the above.  If I didn't, then what is the point of acting as if I
might believe what you assert (other than for debating advantage, of
course)? 

>  In my personal case, such is even more clear, but we can discuss that
>by e-mail if you like.  U of C economists tend to come up with rather
>direct compensation packages.

Gee, is everyone now going to get upset with Pat for assertions of
'superior knowledge' over this, the way they did with me?  :-)

[Gee, I got my econ degree at a U of C, too, although we generally
referred to it as CU, and it was in Colorado and not Chicago.]

>  You may also want to think in terms of small businesses, which is
>where the large job growth has been throughout the last decade and which
>can be particularly hard hit by new regulations. 

And which can be greatly helped by OTHER new regulations.

>  A U of C economist estimated that (all told) the Clinton plan would
>cost $150 billion/year in new taxes (including regulatory costs).  When
>he brought this up to the Clinton campaign, he was told they were using
>$190 billion/year.  Of course, he didn't count some things since he wasn't
>really sure where Clinton stood.

Yes, but what is the effect in the next several years.  Simply stating
what it would bring in in taxes (and there are lots of people who
would argue that it WON'T bring in those kind of taxes) doesn't even
come close to telling the story.

>>Once again we see this 'all or nothing' assumption on your part.  Note
>>that I never asserted that regulation has NO effect on jobs or wages;
>>merely that this idea that corporations will pass 100% of everything
>>through is simply not supported by the facts (or the theory), and
>>hence your efforts to portray it as 'basic micro' are simply
>>incorrect.  See any basic micro text for reasons why this is so.
>>

>  I really wish you would review the above studies.  They would provide
>you with much better information concerning this subject.  However, I do
>note (once again) that you mistate my position on "pass everything
>through".  Saying that "people pay taxes in one way or another" is
>hardly saying "corporations pass 100% of everything through to consumers".
>I should think that is obvious. (Although, I'm not terribly sure how
>consumers got into this discussion.  I never even used that word.)  
>Perhaps, you just want an easier position to defeat.  Or, perhaps,
>you really believe that corporations are faceless money
>generating machines.    

Well, I'm not sure how the fact that regulations have a short-term
impact is meaningful to your argument against them, either.  You have
to look at the long-term effect of the regulatory effort.

>   Politicians rather like voters to believe in faceless
>money generating machines since they are able to raise taxes on
>such without losing too many votes.  The effects on the economy and on
>employees are far less immediately visible to the layman than, say,
>the federal income tax (though certainly great per the studies
>I mentioned).  If you believe in the faceless money machine and that
>taxes are not eventually paid by people in one way or another, then we must
>just agree to disagree since I cannot possibly understand your position.
>Last I heard, businesses were comprised of people.  Of course, maybe they
>are "off budget" people until such a time as it is obvious you are taxing
>them.  I'll let you tell me. :-)

Well, I've never cared much for whether politicians want me to believe
something or not.  What I'd like to know is where you got this
assumption you keep hammering on; just dream it up to apply, or what? 

>  BTW, I suspect you really do believe that taxes are paid by people one
>way or another.  I am not trying to say that you don't.  I also suspect that
>you agree (or would if you read the studies I cited) that taxes that
>directly effect labor cost have a very direct effect on jobs and wages.  I
>think if you try to actually read all of what I wrote, you will see this.
>If you keep making assertions based on what you _want_ me to say, I will just 
>have to let you since I am rather at the end of my endurance level (3 posts) 
>regarding this topic and given your prolific activity here you appear to
>be subsidized in some manner (or at least have more free time than I do).  You 
>seem rather reasonable, just a bit partisan.

Well, I'm not 'subsidized'; at least not in the way I think you mean.
The company is paying for the feed (which I consider irrelevant, since
I could just as well get a free one at home that is not company
related), and I generally do my posting before I go in to work (I
drink my coffee over a computer terminal instead of over a newspaper
:-)) 

-- 
"Insisting on perfect safety is for people who don't have the balls to live
 in the real world."   -- Mary Shafer, NASA Ames Dryden
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Fred.McCall@dseg.ti.com - I don't speak for others and they don't speak for me.
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