Only if - and when - prices are not already maximized to avoid reducing overall spending. The way people talk about this perfectly elastic correlation between taxes and prices is amusing (totally wrong, of course, but still amusing). If boards were able to infinitely raise prices to increase profits and dividends, they would. In fact, they often do even without tax changes

I ask you: if you make a bad financial investment (let's say, you buy lots of crypto and after a few years they are worthless), do you then go back to your company and raise the price of everything to make up for your investment mistakes? Well, you could if you wanted to, but that's a quick way to destroy your business management. Your personal financial responsibilities are not the same as the company's, even more so when a company's board is divided among many different stakeholders

Like Rol said, nobody is talking about raising income taxes on working/middle class households, the discussion is always about increasing taxes on the rich.

Also, is there any evidence of tax rates and inflation being directly correlated?

Top Income Tax Rate

1991-1992, 31%

1993-2002, 39.6%

2003-2012, 35%

2013-2017, 39.6%

2018-2025, 37%

Top Corporate Tax Rate

1988-1992, 34%

1993-2017, 35%

2018-2025, 21%

Top Capital Gains Tax

1987-1997, 28%

1997-2003, 20%

2003-2012, 15%

2013-2025, 20%

Over the last ~35 years we have seen tax rates on income, profits and investments fluctuate and for the most part, inflation has been pretty stable. From 1991-2020, inflation averaged 2.3% per year and we only saw a notable surge in 2021-2023, which were not accompanied by any tax increases or cuts.

On top of that, we have to factor in what the taxes are being used for. Lets say you’re right and the higher taxes are causing the price of consumer goods to increase but those taxes are being used to invest in healthcare, childcare, elder care, education, housing, nutrition, infrastructure, manufacturing, climate change, research & development, etc.

I will gladly take increased prices on consumer goods if that means quality of life in increasing for the average person.

can't raise prices, they will reduce the amount of material being offered (shrinkflation).  

TBH, I am in board meetings for work.  I can assure you they are getting their money one way or another.  Hell it could involve having 5 people do the work of 10 and reducing operating costs.  Ain't no board taking a huge hit on their money, it will 100% be passed on, full stop.  

Going robotics, using AI, outsourcing, etc, etc.  The board is getting their money.  

If there are opportunities for reducing costs without affecting revenue and further maximizing profits, why aren't they already pursuing them independent of a prospective tax change? 

At the margins the incentive is the same whether there is a tax increase or not. 

If a company has 5% YoY growth and potentially can reduce costs to get 7% YoY growth they're going to aim to do that just the same as if they get 2% YoY growth and want 4%. 

They have and are.  A major company will replace workers the second they can.  A tax increase will accelerate their plans.  

Bringing MFG back will raise the costs of good, but IMO, is the answer.  More jobs = more competition = higher salaries = better lifestyle

Which is why I really hope the $1,000,000,000,000 planned investments by Apple, Nvidia, etc come to reality.  The best fix for our system is more jobs in the US. 

This is also why I am not anti tariffs, but on the fence.  Time will tell if jobs come back.  

And before somebody does the whole "false promises" crap (not directed you, you are good guy) that is nonsense.  False investment promises of publicly traded companies is a security and exchange commission violation, a fricking massive one.  

Right. I work in the cost-reduction part of a large healthcare company. Almost every project I work on has a component to reduce labor and operation costs. For example, I am currently working on an ML model to predict which prior authorizations can be fast-tracked to approval and therefore save high-cost clinician time for more complex PAs. 

A tax increase doesn't change the marginal incentive to reduce costs unless it shifts the company toward the red and there is an investor panic. In that situation usually revenue gets affected too as critical staff are dropped in the panic, and once things stabilize the company starts to rehire again.

Large companies are always constantly looking for ways to reduce costs. The effect of tax increases aren't as simple as higher increases -> more cost reductions, as many companies are already operating optimally or as optimally as their cost-saving staff can get them.

Largely agreed, though I think it accelerates plans at cost savings.  It isn't baggage free, which was my only point.  I don't buy into this argument (again not your argument) "raise taxes, rich people can't do anything about it."  

Even if that were the case (which economic literature clearly shows is not always true), you need to understand that the economy is not a zero-sum game. Increases in the prices of services and groceries (or shrinkflation) may sometimes be unavoidable, yet they can still result in a net positive effect on the economy if demand for those products rises and overall consumption expands

Remember: many people with little money is better for the economy than a few people with huge amounts of money. Little money in the hands of many means direct spending i.e., direct GDP growth and increased demand in the "real economy". Huge money concentrated in the hands of a few, on the other hand, often translates into financial speculation, banking reserves, real estate bubbles, tech bubbles, and capital leaving the country (especially in developing nations)

Regardless, without taxes to ensure a minimum distribution of income and the subsidization of services and goods, many people would simply starve and die: Something that should be avoided, even at the cost of some degree of GDP growth

I don’t think the “false promises” crap is as unimaginable as you make it out to be, remember Foxconn during Trump’s first term?

The plan was a $10 billion investment to build an LCD screen manufacturing plant and create 13,000 jobs.

A few years later, the project was scaled back to a $672.8 million investment with a goal of creating 1454 jobs.

It ended up being less than 7% of the original investment with about 11% of the expected jobs created.

The SEC did not take any action against Foxconn for this.

Since this discussion spawned based on a German survey, I'll just continue there. Right now the German state has problems to finance everything they need to spend money on, from infrastructure to military to getting their struggling economy going. They have an expected deficit in the ballpark of €80 billion for next year's budget, so the state is going to take on debt. But the only reason they have to take on debt is because the conservative party in the government refuses to raise taxes on the rich. A study has found that a wealth tax of 1% would bring in €35 billion annually in Germany, which is pretty striking. This means that taking just a measly 3% from the rich would fill the entire hole in the budget and leave some extra money too, which could be used to allow welfare programs to keep up with inflation, as opposed to the current German proposal of making no inflation-adjusted increases at all because the available money is so tight.

You are either gullible or stupid if you believe the lie that taxes on the rich will hurt the regular citizen. It's a popular lie that keeps being told by rich people every time the topic of taxing them appropriately comes up. Their motive is plain greed.

Also, the unsubstantiated hypothesis that all the rich people would raise the prices of their companies' goods quickly falls apart when there are laws against collusion and cartels. They'd lose far more money than via taxes that way.

Remember, we are talking about raising taxes on individuals, not corporations. That's a big difference. A corporation can maintain all their profit margins, because increased taxes on individuals merely mean that people in high management positions get less money out of their overall salaries. It's also incredibly bad PR for corporations if it comes out that the reason for increased prices on goods come down solely to already overpaid board members looking to earn more money for themselves, so that's yet another reason why prices of goods wouldn't go up when taxes for the rich would be increased.