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To: groanup
The elasticity of the cost of capital is base on interest rates, the state of the equity markets, a company's credit rating and outlook etc. The cost of capital, like the cost of taxes has nothing to do with what a company is able to charge for its goods and services.

Please don't confuse liberals with economics. Of course, how much tax is passed on is a function of the elasticity of supply, as well as the elasticity of demand.

65 posted on 12/22/2002 1:59:38 PM PST by Rodney King
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To: Rodney King
Here is a bit more on who pays the corporate income tax. The guy here states that the current thinking is that it is mostly a disguised sales tax, which assumes a high elasticity of supply of capital on an after tax basis.
69 posted on 12/22/2002 2:07:16 PM PST by Torie
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