The Chairman’s Report June 14th, 2024

Why taxing corporations is a really bad idea - unless you want to hide who really pays? 

 

• Americans don’t understand that corporations don’t pay taxes.
• A corporate entity is owned by its shareholders—you and me.
• Corporate taxes are just like any other cost of doing business.  When costs go up, the increase gets passed on to a number of different people in a number of different ways.
• To the degree that the entire cost of the tax increase can’t be passed on to consumers, those increased costs are borne by employees and investors. 
• Most economic studies conclude that 50% to 70% of a corporate tax increase is not passed on in higher prices but is borne by workers, while 30% to 50% is borne by investors.
• If you consume, you pay the corporate tax. If you consume and work for a corporation, you pay the corporate tax twice. If you consume, work and invest your retirement funds in corporate equities, the corporate tax hits you three times. 
• Democrats like to portray big corporations as being run by greedy robber barons.  But, when you pull back the curtain, it isn’t the wizard or the robber baron you see but yourself as a consumer, worker and pensioner.
• A recent Treasury study confirms that 92.6 million families, 49.5% of all American families, pay more in corporate taxes hidden in the prices of the things they buy than they do in individual income taxes.
• President Biden’s proposed corporate tax increases would raise taxes on more low- and moderate-income American families than if he raised individual income-tax rates.
• We must never forget that the corporate tax is a tax on everything we buy, a tax on our wages and a tax on our retirement nest eggs. 

• Hide the true cost of the income/payroll tax system and increased regulation from the American people.
• Distract attention from their numerous failures by creating tensions between the American people over “fairness”.
• Divert attention away from their own failures by blaming greedy corporations and individuals for not paying as they should and trying to convince us that making these scoundrels pay their fair share would reduce our tax burden.
• Convince the American people that the problems we face today are too tough for ordinary people to solve.  That we’d be better off leaving the problem-solving to them because they are much smarter than the rest of us and will use their superior knowledge and intellect to take care of us.

• We all pay the tax in the form of higher prices
• People who work for the corporation pay the tax in the form of lower or stagnant wages and reduced benefits (if they’re lucky enough not to get laid off)
• Higher taxes make a company less profitable.  That reduces the value of their stock and negatively impacts our retirement accounts

• We keep all our paycheck.
• We clearly see the cost of government with every purchase and all will know the real cost of the government that we are receiving.  
• The economy and government tax revenues will grow much more rapidly.  
• Budget cuts are still required to stop expanding the national debt but will not need to be as painful.
• Interest costs on the National Debt will come down and the total will again be less than we pay for defense spending.
• Rates for mortgages, car loans and credit card loans will quickly come down.
• All Americans will be more prosperous and confident about their future.
• Social Security and Medicare will be fully solvent, and no senior will worry about having their retirement income reduced because of the inability to finance the National Debt.

• Vote for the present income/payroll tax system or for the FAIRtax.
• Support the corrupt income tax and the IRS or eliminate it.  It can’t be any simpler than that.
• Hide the true cost of their government or pass the FAIRtax and show everyone the true cost of government on each retail receipt.
• Support the largest transfer of power from government to the people, the FAIRtax, or not.