Taxes and industrial structure

Abstract

Microeconomics assumes that business firms respond to changing costs and prices. Taxes impose costs of businesses, and tax breaks help industries grow. This paper discusses the dynamics of government actions, drawing on the end of the Bell System in the 1970s, and then reviews the history of tax breaks to a variety of large industries, from the oil industry to finance and real estate. It closes by placing the whole discussion in the framework of corruption as it should be defined, not as the Supreme Court defines it now.

Keywords:

• Business structure
• taxes
• Bell System
• oil depletion
• real estate
• Trump

Notes

1 Temin, Fall of the Bell System.

2 Metcalf, “Federal Tax Policy”; Kroll et al., “Brief History”.

3 Miller, Nut Country.

4 Metcalf, “Federal Tax Policy,” 166.

5 Krugman, “Lies, Lies, Lies, Lies”; Nicas, “Apple Says”; Tankersley, “Tax Havens”; T⊘rsl⊘v, Wier and Zucman, “The Missing Profits of Nations”.

6 Greenwood and Scharfstein, “The Growth of Finance”.

7 Neal, Concise History.

8 Foroohar, Makers and Takers, chapter 7.

9 MacGillis, “Surreal Politics”.

10 Ashkenas, Dance and Gates, “How Donald Trump Uses the Tax Code”.

11 Barstow, et al., “Donald Trump”; Buettner and Bagli, . “Donald Trump’s Business Decisions”; Confessore, “When Donald Trump Went to Washington”.

12 Buettner and Bagli, “How Donald Trump Bankrupted”.

13 Buettner, “Trump Casinos’ Debt”; Barstow, Craig and Buettner, “Trump Engaged in Suspect Tax Schemes”; Drucker and Flitter, “Kushner Likely Paid No Federal Income Taxes”.

14 Foroohar, Makers and Takers, 4-5.

15 Freeland, Plutocrats,

16 Page, Bartels, “Democracy”; Rappeport, “Government Work Done”.

17 Vanishing Middle Class: Citizens United (558 U.S. 2012); Temin, Vanishing Middle Class.

18 Ferguson, Golden Rule.

19 Bacevich, America’s War.

20 Bartels, Unequal Democracy; Achen and Bartels, Democracy for Realists.

21 Traugott, “Americans”.

22 Ferguson, Jorgensen and Chen, “Party Competition and Industrial Structure”.

23 Ferguson, Jorgensen and Chen, “Industrial Structure and Political Outcomes”.

24 Lee and Norden, “Secret Power”.

25 Gilens and Page, “Testing Theories of American Politics”.

26 Mayer, Dark Money, 90.

27 Wallis, “Concept of Systematic Corruption”.

28 Teachout, “The Problem of Monopolies”, 7.

29 Teachout, Corruption in America, 15.

30 Acemoglu and Robinson, Why Nations Fail; Lafer, One Percent Solution; Teachout, “The Problem of Monopolies”; Temin, Vanishing Middle Class.