Only 10% Don't Pay Federal Taxes, Stop Complaining

[The Scandinvans]

So you say. The fact remains that your argument is based entirely on a biased interpretation of cherrypicked data, and on that basis I dismiss all criticisms of me as having not supported that one comment of mine. You and Caninope have proven no more than I have, but the self-serving opinion aspect of your comments is more obvious than in mine. I may not have bothered to prove my argument is factual, but you have gone quite a ways towards proving that your argument is not.

Effectively are you saying that the statistics that you rely somehow contain any and all factors relating to them?

[NotnotgnimmiJymmiJ]

More sources that help me:

Bloomberg News http://www.bloomberg.com/apps/news?pid= ... SR3XZfY52o

National Center for Public Policy Research- http://www.nationalcenter.org/WCT010207MinimumWage.html (Conservative, but still with citations, and sourced)

http://www.independent.org/newsroom/article.asp?id=1749 Written by an economist with a PhD from George Mason

http://www.suu.edu/faculty/baker_j/articles/minwage.pdf Joe Baker, PhD, Professor at Southern Utah University

http://knowledge.wpcarey.asu.edu/articl ... cleid=1828 From Professor William Boyle, PhD.

Those aren't "sources," those are just opinion pieces that happen to agree with you. And out of all of those, only one of them actually presented a source (and even then, only one source)

This is what a source looks like

Recent work on the economic effects of minimum wages has stressed that the standard economic model, where increases in minimum wages depress employment, is not supported by the empirical findings in some labour markets. In this paper we present a theoretical framework which is general enough to allow minimum wages to have the conventional negative impact on employment, but which also allows for the possibility of a neutral or a positive effect. The model structure is based on labour market frictions which give employers some degree of monopsony power. The formulated model has a number of empirical implications which we go on to test using data on industry-based minimum wages set by the UK Wages Councils between 1975 and 1990. Some strong results emerge: minimum wages significantly compress the distribution of earnings and, contrary to conventional economic wisdom but in line with several recent studies, do not have a negative impact on employment. If anything, the relationship between minimum wages and employment is estimated to be positive.

[Muravyets]

So you say. The fact remains that your argument is based entirely on a biased interpretation of cherrypicked data, and on that basis I dismiss all criticisms of me as having not supported that one comment of mine. You and Caninope have proven no more than I have, but the self-serving opinion aspect of your comments is more obvious than in mine. I may not have bothered to prove my argument is factual, but you have gone quite a ways towards proving that your argument is not.

Effectively are you saying that the statistics that you rely somehow contain any and all factors relating to them?

No, you're wrong again. Look, I'm sorry that I'm not saying the things you would like to argue about, but you're not going to succeed in putting your words into my mouth.

[Tahar Joblis]

... I beg pardon? Including corporate taxes as part of the share of income paid by individuals?

Trying to hide the lines crossing, are we?

Ummmmm.... no. The corporate income taxes are paid by the shareholders. If you reduce the corporate income tax, you are cutting taxes for shareholders.

Oh really?

No, not really. What you do when you cut corporate income taxes is that you cut corporate income taxes. Some of that surplus may work its way down to shareholders. Some won't. To equate the two is to conflate income with dividends, which is generally a bad mathematical choice. There's a lot of funky shit going on in the world of corporate finance.

A lot goes back into the corporation, into the hands of financiers through debt service/juggling, et cetera. They try to get as much exempted as possible. Corporate income taxes are indubitably paid by the corporation which then decides what to do with the rest of the money. In general, they're paying out up to a market rate for use of capital.

Some fraction may go to shareholders, but to say that shareholders actually pay corporate income tax is absurd. You may as well say that I have negative net taxes, since I'm a state employee. It's quite clearly shading the truth.

[Roman Imperium]

Pretty sure, most of that 10% are politicians and celebreties, lol. (Charlie Rangel, anyone?)

[Muravyets]

Easily. Go to the talking points memo Caninope posted. Not the excerpts the memo cherrypicked from them -- the actual reports. Read the entire things. Plain, blank, unvarnished facts. There you go.

Correlation does not equal causation. <snip>

I never said it did, nor did I suggest anything that would lead one to conclude I think it does. Therefore, on the grounds that I did not make the argument you are now attempting to attack (and on the grounds that proving that you got your ideas by copying biased opinions of other people is not actually persuasive), I snip/ignore the rest of your remarks as irrelevant to my argument.

You were actually quite clearing say that when minimum wages were raised they had no adverse effect on employment rates. I was trying to articulate my opinion that those correlations ignored other issues.

I bolded the part that renders your argument unconvincing and thus uninteresting to me. Your opinion is not more meaningful to me than my own is.

As well, you yourself are exhibiting the very same bias you lament in your attempts to defend your own position.

I am not defending a position. I am dismissing yours.

I made a comment that you and Caninope demanded that I defend, but I refused because I think your demand is intellectually dishonest. If I refused to defend my position, then obviously I am not making an attempt to defend it. As far as I'm concerned, it doesn't need defending.

Milton Friedman, those he is obviously biased as are all people, is a winner in the Noble Prize in Economic Prizes and is respected by even his critics as an intelligent person who contributed much to the field of economic thought. So to disregard his opinion outright is not the most advisable course of action.

Appeal to Authority is a logical fallacy. Friedman's views have been disputed by economists just as exalted as he is, and even he has recently repudiated some of his own past arguments. If even Milton Friedman is willing to concede that he was wrong on somethings, I don't see why I should be pooh-poohed for not considering him the ultimate authority that proves you right.

Regarding my opinions, they are in agreement to the Austrian School of Economic Thinking and the philosophy I adopted are my own conclusions supplemented by various philosophers/thinkers.

Another Appeal to Authority fallacy which boils down to little more than "I stole my opinions from these other people so that means I must be right, neener-neener." The Austrian School is not the only game in town so claiming your adherence to it as a foundation for your rightness is hardly convincing to anyone but other adherents to the Austrian School.

Furthermore, every person merely offers their own version of another person's philosophy.

Which leaves us with the unanswered question of how valid are those other people's philosophies. Look, you might be willing to admit you don't have an original thought in your head, but that is entirely beside the point. Merely declaring that you copy the ideas of people you agree with is not going to cut it when it comes to showing yourself to be more grounded and more right than me.

[NotnotgnimmiJymmiJ]

... I beg pardon? Including corporate taxes as part of the share of income paid by individuals?

Trying to hide the lines crossing, are we?

Ummmmm.... no. The corporate income taxes are paid by the shareholders. If you reduce the corporate income tax, you are cutting taxes for shareholders.

Oh really?

Yes.

No, not really. What you do when you cut corporate income taxes is that you cut corporate income taxes. Some of that surplus may work its way down to shareholders. Some won't. To equate the two is to conflate income with dividends, which is generally a bad mathematical choice. There's a lot of funky shit going on in the world of corporate finance.

Companies don't have to redistribute their earnings to shareholders through dividends. They can repurchase shares. Let's say you have a company whose policy it is to not pay any dividends. If they declare that they will be retaining all of their earnings and donating all of their assets to charity one year from now, what do you think the price of the stock ought to be?

A lot goes back into the corporation,

Yes, to be invested in positive net present value investments.

into the hands of financiers through debt service/juggling, et cetera.

Debt service is an expense. Corporations are only taxed on Net Income, which is Revenues minus Expenses.

They try to get as much exempted as possible. Corporate income taxes are indubitably paid by the corporation which then decides what to do with the rest of the money. In general, they're paying out up to a market rate for use of capital.

None of this is relevant.

Some fraction may go to shareholders, but to say that shareholders actually pay corporate income tax is absurd.

They own the company. They have a legal claim on the assets of the corporation. Management is just a fiduciary.

You may as well say that I have negative net taxes, since I'm a state employee. It's quite clearly shading the truth.

Irrelevant.

[Tahar Joblis]

Yes.

No.

Companies don't have to redistribute their earnings to shareholders through dividends. They can repurchase shares. Let's say you have a company whose policy it is to not pay any dividends. If they declare that they will be retaining all of their earnings and donating all of their assets to charity one year from now, what do you think the price of the stock ought to be?

How much was Enron stock worth, back in the day?

Debt service is an expense. Corporations are only taxed on Net Income, which is Revenues minus Expenses.

Which is one reason why they tend to do a lot of debt juggling.

None of this is relevant.

All of it is. The corporation is what actually shells out money on taxes.

They own the company. They have a legal claim on the assets of the corporation.

So do creditors, in the event of bankruptcy.

Irrelevant.

It's precisely the same degree of bullshit.

Dividends can be taxed. Capital gains can be taxed. Both those taxes are actually paid by the investor. Corporate income tax? The corp lawyers and accountants handle (and dodge) that.

When I shop around on stocks and buy mutual funds, I'm basically doing the same sort of thing that banks do - providing capital and getting a kickback on it. How much of that kickback lands in my bank account is my income.

It's also an issue of bad math. If you're taking (TAX)/(GROSS INCOME), the fact that you just generated a shitload of illusionary income means you probably just plotted something that isn't actually out of 100%.

[Tahar Joblis]

Now, I'm going to further elucidate on the topic anyway. Here's how taxes work.

I pay taxes on my income. I pay John to fix my car out of this post-tax income. John then pays taxes on his income, including on the money I paid to him. He decides to buy a burger. A sales tax is paid on that transaction. He also leaves a tip. That transaction is classed as income for the waiter, who follows the law and pays income tax on that. He decides to buy a car. Guess what? Taxed.

Under ordinary methods of taxation, virtually every transaction between two independent individuals are targeted. Corporate income taxes are, in comparison, pretty porous. They're being paid on net rather than gross. I don't get to deduct my living expenses from personal income.

Nevertheless, corporate income tax is paid on that income. When the dummy entity and legal cut-out that a corporation is decides to pay out money to keep investors happy, that's a transaction no more or less inherently privileged than my paying back Benny the Shark for covering my poker losses last week or my paying a babysitter.

This is why talk about "double taxation" and other similar slick tricks like including corporate income taxes on the top for determining tax burdens of the wealthy are dishonest. It's saying that unlike virtually every other transaction, corporations paying off investors doesn't count as an extra step.

Everything is taxed twice, three times, four times, millions of times over. The entity paying the tax is... guess what, the one facing legal liability when it doesn't get paid. Which is not the stockholder.

[Shofercia]

Let's not tax the superrich anymore than the average Joe, after all, they earned it. Let's have a flat tax on everyone earning, a tax of 20%.

But let's also cut expenditure, to balance the budget:

1. Repudiate the debt (and the corresponding interest)
2. Nationalize the military industrial complex
3. Allow other countries to compete with US pharmaceutical companies
4. End all farming subsidies (most of them go to farmer corporations that lobby for it)
5. Make everyone pay back the Bailout
6. Stop protecting US companies operating abroad (or charge them a higher tax for that protection)
7. Etc, etc, etc

The thing is, the superrich whine about the taxes that they pay to the Federal Government. But the money that they take out of the Federal Government is so much more. How much did Halliburton make on the Iraq War? How much did the banks make during the Bailout? In essence most of the superrich are the welfare queens that are dragging the middle class down.

[The Scandinvans]

Note, I believe we should return to topic as our little discussion has moved far away from original topic.

[NotnotgnimmiJymmiJ]

Companies don't have to redistribute their earnings to shareholders through dividends. They can repurchase shares. Let's say you have a company whose policy it is to not pay any dividends. If they declare that they will be retaining all of their earnings and donating all of their assets to charity one year from now, what do you think the price of the stock ought to be?

How much was Enron stock worth, back in the day?

Completely irrelevant to the discussion at hand. The executives at Enron stole wealth from their shareholders. That's why they want to jail. It's like me saying, "gee, it doesn't matter what my income taxes are because at any moment someone could rob me and take all my money!"

Debt service is an expense. Corporations are only taxed on Net Income, which is Revenues minus Expenses.

Which is one reason why they tend to do a lot of debt juggling.

None of this is relevant.

All of it is. The corporation is what actually shells out money on taxes.

And the shareholders own the corporation.

They own the company. They have a legal claim on the assets of the corporation.

So do creditors, in the event of bankruptcy.

Irrelevant.

Irrelevant.

It's precisely the same degree of bullshit.

If you say so.

Dividends can be taxed. Capital gains can be taxed. Both those taxes are actually paid by the investor. Corporate income tax? The corp lawyers and accountants handle (and dodge) that.

Again, irrelevant. The shareholders own the corporation, and the corporation pays the tax.

When I shop around on stocks and buy mutual funds, I'm basically doing the same sort of thing that banks do - providing capital and getting a kickback on it. How much of that kickback lands in my bank account is my income.

If the corporate tax rate is lower and a company is able to increase their profits. If your mutual fund owns shares in that company, your income from the mutual fund will rise.

It's also an issue of bad math. If you're taking (TAX)/(GROSS INCOME), the fact that you just generated a shitload of illusionary income means you probably just plotted something that isn't actually out of 100%.

Irrelevant.

[Tahar Joblis]

Companies don't have to redistribute their earnings to shareholders through dividends. They can repurchase shares. Let's say you have a company whose policy it is to not pay any dividends. If they declare that they will be retaining all of their earnings and donating all of their assets to charity one year from now, what do you think the price of the stock ought to be?

How much was Enron stock worth, back in the day?

Completely irrelevant to the discussion at hand. The executives at Enron stole wealth from their shareholders. That's why they want to jail. It's like me saying, "gee, it doesn't matter what my income taxes are because at any moment someone could rob me and take all my money!"

Not at all irrelevant. What a stock "should" be worth has next to nothing to do with how trading it can make you money.

Irrelevant.

Quite relevant. Creditors get paid off earlier, too.

Again, irrelevant. The shareholders own the corporation, and the corporation pays the tax.

But the shareholders aren't the corporation. They won't get charged for criminal activity by the corporation, they aren't required to pay off the corporation's excess debts, et cetera. Legally and financial, the corporation is an independent entity that happens to be beholden to the stockholders. See above.

When I shop around on stocks and buy mutual funds, I'm basically doing the same sort of thing that banks do - providing capital and getting a kickback on it. How much of that kickback lands in my bank account is my income.

It's also an issue of bad math. If you're taking (TAX)/(GROSS INCOME), the fact that you just generated a shitload of illusionary income means you probably just plotted something that isn't actually out of 100%.

Irrelevant.

No, quite relevant. It's like dividing by zero and concluding 1=2.

[NotnotgnimmiJymmiJ]

Companies don't have to redistribute their earnings to shareholders through dividends. They can repurchase shares. Let's say you have a company whose policy it is to not pay any dividends. If they declare that they will be retaining all of their earnings and donating all of their assets to charity one year from now, what do you think the price of the stock ought to be?

How much was Enron stock worth, back in the day?

Completely irrelevant to the discussion at hand. The executives at Enron stole wealth from their shareholders. That's why they want to jail. It's like me saying, "gee, it doesn't matter what my income taxes are because at any moment someone could rob me and take all my money!"

Not at all irrelevant. What a stock "should" be worth has next to nothing to do with how trading it can make you money.

Irrelevant.

Quite relevant. Creditors get paid off earlier, too.

None of this has anything to do with the discussion at hand.

Again, irrelevant. The shareholders own the corporation, and the corporation pays the tax.

But the shareholders aren't the corporation. They won't get charged for criminal activity by the corporation, they aren't required to pay off the corporation's excess debts, et cetera. Legally and financial, the corporation is an independent entity that happens to be beholden to the stockholders. See above.

Doesn't matter, the shareholders still own the corporation.

When I shop around on stocks and buy mutual funds, I'm basically doing the same sort of thing that banks do - providing capital and getting a kickback on it. How much of that kickback lands in my bank account is my income.

It's also an issue of bad math. If you're taking (TAX)/(GROSS INCOME), the fact that you just generated a shitload of illusionary income means you probably just plotted something that isn't actually out of 100%.

Irrelevant.

No, quite relevant. It's like dividing by zero and concluding 1=2.

I feel like you haven't even read anything I've said.

[Tahar Joblis]

Again, irrelevant. The shareholders own the corporation, and the corporation pays the tax.

... which is to say that they don't pay the tax. The corporation does.

It's not the least bit irrelevant. In terms of practical legal enforcement, a typical shareholder "owns" a company little more than a bank that it owes money "owns" it.

the shareholders still own the corporation.

Which doesn't matter, because they still aren't actually taking out their checkbooks and paying corporate income tax.

I feel like you haven't even read anything I've said.

You've said little, and responded to what I've had to say by completely failing to address points, claiming that nothing matters. Project much?

Go back up. Read my post explaining how everything is "double" taxed. Address the issue of legal liability. Address the issue that the money that goes towards paying out corporate income taxes is not controlled by the shareholder, but instead by the corporation. Address the issue that the corporation is a distinct entity from the shareholder, and therefore a transaction between the two is fundamentally no different from a transaction between you and your grandmother, grocery store, mechanic, or hooker.

[NotnotgnimmiJymmiJ]

Again, irrelevant. The shareholders own the corporation, and the corporation pays the tax.

... which is to say that they don't pay the tax. The corporation does.

And the shareholders own the corporation. The people controlling the company are just the fiduciaries. If I own a piece of the corporation and its taxes are raised, that decreases MY wealth.

It's not the least bit irrelevant. In terms of practical legal enforcement, a typical shareholder "owns" a company little more than a bank that it owes money "owns" it.

Plainly not true. Management does not have a fiduciary duty to debt holders. Management has a practical legal obligation to act in its shareholders interests. Ask Jeff Skilling if his fiduciary duty was subject to practical legal enforcement.

Debt holders do not exercise any control over the firm either. Shareholders appoint the board of directors, and the board of directors appoints management. Or were you under the impression that all of this occurred as if by magic?

the shareholders still own the corporation.

Which doesn't matter, because they still aren't actually taking out their checkbooks and paying corporate income tax.

I feel like you haven't even read anything I've said.

You've said little, and responded to what I've had to say by completely failing to address points, claiming that nothing matters. Project much?

I've said little because you keep on talking about things which have nothing to do with the issue at hand, this post being the notable exception. So far, I feel like you've just been typing stuff that you think sounds good and hoping that something coherent comes out of it.

Go back up. Read my post explaining how everything is "double" taxed. Address the issue of legal liability.

Irrelevant.

Address the issue that the money that goes towards paying out corporate income taxes is not controlled by the shareholder, but instead by the corporation.

Who do you think controls the corporation?

Address the issue that the corporation is a distinct entity from the shareholder, and therefore a transaction between the two is fundamentally no different from a transaction between you and your grandmother, grocery store, mechanic, or hooker.

I don't own my grandmother, my grocery store, my mechanic, or any hookers. They have no legal or financial obligations to me.

[United Dependencies]

Meh. The rich and the corporations they own don't really pay their taxes anyway. I move to lower income taxes and supplement with other taxes that cannot be avoided. Like sales tax.

[Novistrainia]

Meh. The rich and the corporations they own don't really pay their taxes anyway. I move to lower income taxes and supplement with other taxes that cannot be avoided. Like sales tax.

I support the sales tax belief as it is harder to avoid them, you would have to go black market, like New England did with there Tea during the 1700's, ya know even though the monopoly controlled East indie companies tea was cheaper even with tax.

Anyways back on point, a national high sales tax, would be better than income tax, as it effects only items bought and sold.

Also shame on you, the Wealthy/rich do pay there share, in fact they are usually the highest tax source in a country, with the middle class coming up a close second usually, with sheer numbers.

The thing is
Say you have 4 billion dollars, you earn 175 million, and have to pay about 400 K after your lawyer loops holes you, one you have the money to pay it, two you probably don't have any debts to worry about;
Now to middle class joe, he makes 75 K in a year, has maybe 100 K saved up, has a mortgage and car loan and few credit bills, well the 10 to 12 K they take from his paycheck effects him far worst than the 400 K the billionaire loses.

It is that question what is a dollar worth to you.
Billionaire: Dollar, what is a dollar
Middle Class: redbox movie, lottery ticket.
Working Poor: Some food, maybe some money for cheap clothes
The Ultra Poor: the next meal,and drink.

[Tahar Joblis]

Plainly not true. Management does not have a fiduciary duty to debt holders. Management has a practical legal obligation to act in its shareholders interests. Ask Jeff Skilling if his fiduciary duty was subject to practical legal enforcement.

Debt holders do not exercise any control over the firm either. Shareholders appoint the board of directors, and the board of directors appoints management. Or were you under the impression that all of this occurred as if by magic?

No. Any other silly questions?

In practical terms, a shareholder has no more a sway over the decisions made in the operation of a corporation than the bank lending it money... in fact, oft times less. In share-weighted voting scenarios with mutual fund holdings and short-term investment churn, many shareholders hold a zero power index.

The theoretical notion is that a corporation will go and make money for stockholders. The actual management of the company runs this. The board of directors - again, theoretically - acts as a check on the actual management, hiring or firing as necessary. The corporation is not actually beholden to do exactly what shareholders want. It's only very loosely checked to do so - less so than, say, a political officeholder. The only thing it is "obliged" to do is make money without overtly breaking the law. That's pretty minimal.

I've said little because you keep on talking about things which have nothing to do with the issue at hand

Except they do. So address them if you want to disagree.

A corporation is a distinct entity from any shareholder - legally, financially, et cetera. The corporation as an entity exercises detailed control over its finances and tax-paying habits that the shareholder does not. The corporation shoulders legal responsibility for doing so correctly; the shareholder does not. The corporation sends money to the federal government for corporate income taxes; the shareholder does not.

In no meaningful fashion is the corporation the same entity as its hundreds, thousands, of shareholders. In no meaningful fashion do they pay its taxes. They do not see that money, cannot take that money, cannot apply for refunds on that money - nothing. The corporate income tax is a loophole-ridden transaction tax on money taken in by the corporation; dividend taxes are transaction taxes on money paid out by the corporation.

I'll spell that out for you again. The shareholder at no time is paying out money to the federal government to cover corporate income taxes. That's managed within corporate finances. If the corporation cheats on its taxes, the shareholder is not held responsible for paying back taxes. If the corporation overpays, the shareholder does not get a refund check. The modern investing shareholder is, for all practical intents and purposes, a creditor, exchanging capital for income.

Who do you think controls the corporation?

Varies. In practical terms, control of the corporation is sometimes diffuse, but quite typically concentrated in the hands of an executive, at least in the short term - quite often, in the case of publicly traded companies, one with a lot of friends sitting on a lot of boards of directors.

I don't own my grandmother, my grocery store, my mechanic, or any hookers. They have no legal or financial obligations to me.

They can. They may owe you money, services, compensatory damages, et cetera. And if they defaulted on those obligations, you could take them to court. Were a corporation to default on its obligations to you, you take the corporation to court. Again, not the shareholders.

[Tahar Joblis]

Also shame on you, the Wealthy/rich do pay there share, in fact they are usually the highest tax source in a country, with the middle class coming up a close second usually, with sheer numbers.

Actually, the wealthy contribute a similar share of their total gains as the middle classes... sometimes less. As of the 2007 Survey of Consumer Finances, an estimated 71% of the country's wealth is in the hands of 10% of the population.

Income? 47% of the income is in the hands of 10% of the popultaino. Even within the top 10%, these figures are immensely skewed, with the top 5% holding the lion's share.

When you take into account sales taxes, Social Security, and other less-progressive taxation schemes in use, it suddenly becomes clear how the wealthy can fail to pull their share. Republican talking heads almost always use figures for income tax alone, which accounts for only a fraction of total taxation. Everything else?

Well, income from investments tends to be pretty lightly taxed compared to top income brackets - and is a lot easier to hide, shuffle, or find exemptions for. SS taxes top off with the Alternative Minimum Tax. Sales taxes are downright regressive.

The figure I objected to showed the wealthy contributing almost exactly the same share. I took issue with it, since the figure is almost certainly skewed to overreport the percentage paid out by the wealthy via the inclusion of corporate income taxes.

[Wustershershershaush]

The free market almost always works better when taxes are reduced.

You assume the market is/would be in equilibrium without taxes. Not always the case.

[NotnotgnimmiJymmiJ]

Plainly not true. Management does not have a fiduciary duty to debt holders. Management has a practical legal obligation to act in its shareholders interests. Ask Jeff Skilling if his fiduciary duty was subject to practical legal enforcement.

Debt holders do not exercise any control over the firm either. Shareholders appoint the board of directors, and the board of directors appoints management. Or were you under the impression that all of this occurred as if by magic?

No. Any other silly questions?

In practical terms, a shareholder has no more a sway over the decisions made in the operation of a corporation than the bank lending it money... in fact, oft times less.

A typical individual shareholder has about as much power over a corporation as I do over the running of our government. Yet we still call it a "Democracy."

But how do you think someone takes control of a corporation? They buy a controlling share of the stock. This is not at all uncommon, especially when poor management has driven down a company's stock price or when it has something valuable to offer another company. If I control more than 50% of the stock, I have legal control over the corporation, or do you dispute this?

In share-weighted voting scenarios with mutual fund holdings and short-term investment churn, many shareholders hold a zero power index.

If they want more power, they should buy more shares. That is the whole point of shareholder democracy. If that weren't how it functioned, it wouldn't be shareholder democracy any more than normal democracy could give me 12 votes.

The theoretical notion is that a corporation will go and make money for stockholders. The actual management of the company runs this. The board of directors - again, theoretically - acts as a check on the actual management, hiring or firing as necessary. The corporation is not actually beholden to do exactly what shareholders want.

It is beholden to do what the shareholders want. It is not beholden to do what an individual shareholder wants. You need a majority of the votes.

It's only very loosely checked to do so - less so than, say, a political officeholder.

Funny that you should choose that example.

The only thing it is "obliged" to do is make money without overtly breaking the law. That's pretty minimal.

Did I claim they were supposed to be doing something else? IMO, they'd be breaking the law if they were doing other stuff on the shareholder's dime.

I've said little because you keep on talking about things which have nothing to do with the issue at hand

Except they do. So address them if you want to disagree.

A corporation is a distinct entity from any shareholder - legally, financially, et cetera. The corporation as an entity exercises detailed control over its finances and tax-paying habits that the shareholder does not. The corporation shoulders legal responsibility for doing so correctly; the shareholder does not. The corporation sends money to the federal government for corporate income taxes; the shareholder does not.

In no meaningful fashion is the corporation the same entity as its hundreds, thousands, of shareholders. In no meaningful fashion do they pay its taxes. They do not see that money, cannot take that money, cannot apply for refunds on that money - nothing. The corporate income tax is a loophole-ridden transaction tax on money taken in by the corporation; dividend taxes are transaction taxes on money paid out by the corporation.

Excuse me? Are you talking to me? Because I'm about 100% certain that I never claimed that a corporation was the same entity as its shareholders. Now do you see why I get the distinct impression that you're not reading the things I've been writing? Now do you understand why I keep telling you that the things you keep saying are irrelevant?

I'll spell that out for you again. The shareholder at no time is paying out money to the federal government to cover corporate income taxes. That's managed within corporate finances. If the corporation cheats on its taxes, the shareholder is not held responsible for paying back taxes. If the corporation overpays, the shareholder does not get a refund check.

Actually the corporation would get the refund check and either reinvest it or give it back to the shareholders in the form of share buybacks or dividends.

The modern investing shareholder is, for all practical intents and purposes, a creditor, exchanging capital for income.

Except for fiduciary duty, and control over the company.

Who do you think controls the corporation?

Varies. In practical terms, control of the corporation is sometimes diffuse, but quite typically concentrated in the hands of an executive, at least in the short term - quite often, in the case of publicly traded companies, one with a lot of friends sitting on a lot of boards of directors.

And who appoints them?

I don't own my grandmother, my grocery store, my mechanic, or any hookers. They have no legal or financial obligations to me.

They can. They may owe you money, services, compensatory damages, et cetera. And if they defaulted on those obligations, you could take them to court. Were a corporation to default on its obligations to you, you take the corporation to court. Again, not the shareholders.

Yes, and that's another important distinction you've made between a shareholder and a creditor. Management only has the obligation to act in the shareholders interests. The corporation doesn't owe shareholders anything in the case of bankruptcy if there is nothing left after the creditors are through.

[Caninope]

I am not defending a position. I am dismissing yours.

I made a comment that you and Caninope demanded that I defend, but I refused because I think your demand is intellectually dishonest. If I refused to defend my position, then obviously I am not making an attempt to defend it. As far as I'm concerned, it doesn't need defending.

You should defend it, you made the claim. The reason why you are dismissing our sources is because it doesn't fit into your world view, and you try to label the sources (some rather unfairly) as "neocon spin machines"

[Tahar Joblis]

A typical individual shareholder has about as much power over a corporation as I do over the running of our government.

Less, actually.

But how do you think someone takes control of a corporation? They buy a controlling share of the stock. This is not at all uncommon, especially when poor management has driven down a company's stock price or when it has something valuable to offer another company. If I control more than 50% of the stock, I have legal control over the corporation, or do you dispute this?

Which is precisely an example of 49% of the ownership of the company exercising absolutely no control over the company they are invested in. The use of a direct share-weighted voting scheme results in power disproportionate to investment. I recommend you start reading here and catch up. The long and the short of it is that shareholder influence is distributed in an even more skewed fashion than shareholder investment.

Note that the peculiar financial structure of corporations, with subsidiary structures of sorts, allows the further leverage of operational power well beyond the 2:1 factor... as does widespread shareholder apathy driven by indirect holdings, fund holdings, et cetera.

Funny that you should choose that example.

Funny, because it's true.

Did I claim they were supposed to be doing something else? IMO, they'd be breaking the law if they were doing other stuff on the shareholder's dime.

Than making money? Actually, they could be trying to change the world.

As long as they're not just trying to scam people out of their money, it's not criminal of them to fail to turn a profit. Corporations can have missions other than making money. That's just usually in there somewhere, which is why they're for-profit corporations.

Excuse me? Are you talking to me? Because I'm about 100% certain that I never claimed that a corporation was the same entity as its shareholders.

That's nice. Because you're defending the claim that shareholders pay corporate income taxes. Not my fault if you can't offer a coherent argument, because that's what I'm doing here.

It's quite simple. Not being the same entity places the shareholders at a remove from all activity by the corporation. Including paying taxes. Enough so that saying that the shareholder "does" something that the corporation is doing is absurd.

Actually the corporation would get the refund check and either reinvest it or give it back to the shareholders in the form of share buybacks or dividends.

Corporation gets the refund. Corporation decides what to do with it. Not Joe Shareholder looking at his $18.93 share of the refund and saying "OK, I'll use that to buy more shares." Joe Shareholder is not paying Apple's corporate income tax any more than Joe Shareholder is wholesaling iPads and marketing them on television.

Except for fiduciary duty, and control over the company.

Both of which are as a matter of practical course ... negligible in analyzing the relationship of Joe Shareholder with the company.

And who appoints them?

Right. It's a chain several links long.

Now, compare with voters in a political system. Voters directly sign petitions to put candidates on the ballot. Voters directly vote for or against candidates. Voters can even directly put in recall measures ("Hi guv'nor Arnie! How's tricks?"). If districts are weighted in such a manner as to strip them of actual voting effect, they can go directly to court and win. (See Banzhaf's court case for an example of a multi-district local governance system that was forced to change its ways.)

Yes, and that's another important distinction you've made between a shareholder and a creditor. Management only has the obligation to act in the shareholders interests. The corporation doesn't owe shareholders anything in the case of bankruptcy if there is nothing left after the creditors are through.

Right. Which means you're the low creditor on the totem pole. You've traded the ability to maybe influence the election of a board member for the ability to directly pressure the company and pick up the pieces if it files for bankruptcy instead of fulfilling its obligations.

Fundamentally? Same role. Investor supplies capital in exchange for income. Money now for money later.

[Caninope]

Which is precisely an example of 49% of the ownership of the company exercising absolutely no control over the company they are invested in. The use of a direct share-weighted voting scheme results in power disproportionate to investment. I recommend you start reading here and catch up. The long and the short of it is that shareholder influence is distributed in an even more skewed fashion than shareholder investment.

Actually in large corporations, one can get away with having only a plurality of the shares.