It doesn't work that way.

If a company is charged a tax then some of the tax is bourne by the company itself and some is passed forward to the consumers and backwards up the supply chain. Infact it doesn't actually matter whether the tax is originally placed on the producers or the consumers of the product. Whether the government taxed tobacco growers, tobacco companies or tobacco sales the cost would get passed onto the consumer because people are unlikely to decrease their consumption much in reaction to a price increase. Taxes aren't sticky, and who pays the tax is really dependent on the elasticity of demand/suppy of those involved.

Except it does work that way ...

Companies and individuals will do everything in their power to increase the cost of their goods or services, or reduce their expenses, to offset increased costs. These costs continue to be passed along until they reach a company or individual who doesn't have the ability to pass the cost along, and this (generally) means that the costs are felt by the middle class and the poor.

Certainly, the worker who is layed off because his tractor factory's production was cut may not associate it with an increased tax on canola oil which forced farmer to reduce their expenses (which resulted in fewer tractors being bought) but that would be the cause.

The more competitive the market, the less market power the producers/suppliers have. As the economy tends to be more competitive than not companies hold a little but not absolute market power. Also the more flexible consumers are, the more market power they have. If the price of canola oil goes up, people can easily substitute it for olive oil. So whilst Canola oil farmers would suffer, olive oil farmers would benefit.

And in this scenerio, when the people who produce canola switch over to producing another kind of oil or go out of business how does the tax associated with canola oil increase the revenue of the government; and how do the companies who depend on selling their goods and services to canola oil producers benefit from the reduced market for their goods and services?

You're looking at things based on too much of a (moronic) academic model which leads far too many economists to make poor decisions when it comes to the economy.

I got an idea. Put Draconian controls on money. No more shifting money to multiple and foreign accounts and put the income tax like a payroll tax on all stock and bond trading. Problem solved.

Except in most cases, taxation is applied across the whole of the economy or sectors of the economy and this tends to reduce the overall incentive distortion of the extra taxation which is applied. You seem to be arguing semantics here; are we arguing about whether the tacksation would raise revenue or are we arguing about who pays the cost of the tacksation? It seems we're trying to argue the latter, because I haven't seen an argument from you which implies that revenue would not increase from increased taxation, just about whether the wealthy people pay the additional taxation.

My keyboard is dying, I just lost the ecks button.

Right, and I don't care about causation.

Wall-mart has this supper computer that just data mines a whole bunch of stuff. One thing they noticed, is when bad weather enters Florida, people buy a lot of strawberry pop tarts. They don't know why, and don't really care. They just know it happens. So, they monitor the weather, and when they see bad weather heading for Florida, they send them more strawberry pop tarts.

Observed data is far better then theory. We could talk until we are blue in the face about what we think raising taxes will do, but who cares? Neither of us would probably be right, because it's a very complex problem. But, I can tell you that raising taxes will not bring in more dollars, because I have the last 60 years worth of data points telling me it won't.

I don't care why it's true. I just care that it is. Raising taxes on the rich will not increase revenue. Anyone who looks at the data, can tell you this.

Passing a law that you expect to pay for by doing this, is to completely ignore what the last 60 years is telling you.

Because a correlation doesn't prove theres a link. To prove there is a link you need to prove causation, you need something which says that if X happens there will be a change in Y because of Z.

You have numerous factors which have changed alongside the taxation rate. You have changes in tax law, changes in the quantity of income and wealth and you have changes in the rate of taxation. You have any number of things which have changed and therefore the change in total tax income from that bracket vs the changes in overall taxation of that bracket are useless when taken alone. You'd have a strong case if the only changes which had been made were the level of taxation and the quantity of revenue from taxation from that economic group.

With your example the only information which was applicable would be the number of rainy days vs the number of pop tarts sold. Its a pretty simple equation and its easy to imply causation between the weather and number of pop tarts sold because there are so few variables outside of those two variables which could effect the equilibrium.

Ok let me word it another way.

In the history of the US, we have never been able to collect more then 19.5% of GDP from the top 1%. We currently collect 19.5% from the top one percet. What plan does Obama have that affords him the ability to do what no administration before him could?

Squilliam, I take it I worded that a little better to explain my point? (being you don't have an answer).