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Politics : View from the Center and Left -- Ignore unavailable to you. Want to Upgrade?

To: Fred Gohlke who wrote (11171)	2/8/2006 2:33:30 PM
From: TimF	Respond to of 544273

"beneficial" to whom? Beneficial to the company, to the customers (economies of scale can make it cheaper for customers when their suppliers are large even if it means there will be less companies competing to supply a certain good or service), to the economy as a whole. If you want to be really specific you could make my one question "What if size isn't a necessity but is merely beneficial?", in to thousands of questions for all the different possibilities of someone benefiting, but for simplicities sake what if it is just a net benefit overall. 2) What is a "neutral" size? By " What about when size is neutral?" I mean what if a company becoming somewhat bigger or somewhat smaller isn't much of an net negative or positive for the economy, for society, for the customers of the company, for its suppliers, ect. Whatever size an entity attains it must bear the tax appropriate for that size. I don't think you have made the case that it is appropriate for a larger entity to automatically pay a higher tax. Since the tax is passed on to the consumer, it's not a burden ... unless the entity grows to a point where the tax forces pricing above that needed by others seeking to attract the same consumers. Even a small increase in tax can reduce profit for the company. Even if it doesn't it is a burden on customers. Some functions can't efficiently be done by a small company. Oil refineries need to be large to be efficient. You can't have the lead contractor for the building of an aircraft carrier be a small company, ect. To the extent the larger entity just pays the tax you provide a burden on the company (lower profits), or its consumers (higher prices), or some combination of the two. To the extent that the business reorganized to be smaller you probably reduce some economies of scale and perhaps lower the total production of the economy. You say "So, our solution to the problem must focus on unwarranted size. It must not injure large entities whose size is dictated by necessity.", but the proposed tax doesn't take that factor in to account. If it did take that fact in to account it would still be problematic, as you would have all sorts of political or bureaucratic decisions about what size is necessary for what function, and who should get punished how much for what level of size. You also say "but the target ain't the biggies ... it's the baddies" But the proposed tax is purely target by size. You responded to a post where I said that, with this post Message 22143382 but your response doesn't really address the issue. I will reply further directly to that post. Tim