Quote:
Originally Posted by TylerSVT
I get that, but were talking about scarce resources. Its not like they are making production uneconomical, they are just limiting the amount of surplus value that the company will see. And with the Scarce markets the companies know full well that they need the resources that they are feeding off of(like oil or mining).
I think the idea is flawed because the trickle down doesnt work, i get you want to increase investment but as long as you keep your taxation competitive i dont see why raising it is so bad.
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I would like to challange that arguement. For example a typical oil and gas company would have a wide range of properties and wells that all have different rates of return, ranging from wildly economic to marginally economic to uneconomic. It's not like everything in their portfolio is wildly profitable and taking a bit more off the top doesn't have an impact on the amount of business they do and falls under 'surplus value.'
Higher corporate taxes would push some anticipated new wells currently in the 'marginally economic' bucket into the 'uneconomic' bucket and these wells won't be drilled. On the face of the entire portfolio of assets taking some marginally economic stuff away wouldn't look like a major impact for that specific company, slightly less production etc. etc.
But what about the drill crews who would have been hired to drill these wells? The impact is huge, because it takes away
all of the revenue they would have taken in on these wells and thus ripple down from there. This has a trickcle down effect indeed.