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Corporations Don't Pay Taxes... People Do

Posted by Art Lewis on

Art Lewis

Art Lewis

It’s easy to sit back and rail against corporate greed. Indeed, in many cases Corporate America has it coming. From excessive golden parachutes for executives leaving the company, many of whom failed to enhance the business model, to lavish spending on parties and perks, some companies deserve the negative attention.

Fortunately most company executives act responsibly on behalf of their stockholders, employees and customers. They run a tight ship producing good products and a fair profit, a profit that more and more has caught the attention of our elective representatives as they struggle to balance budgets they have laden with largess.

But wait. If you tax a corporation; are you not really taxing its customers? Simply put,  corporations don’t pay taxes…people do. The company only has money because someone has purchased products or utilized services. In other words, the customer pays the tax.  Somewhere along the line, those taxes must be taken into account when pricing is considered.

The company may also have funds provided by investors. Those dollars, however, don’t go to paying taxes. Instead, they are used for capital improvements and operational costs. Besides, those investment dollars also come from people.

Bottom line…we pay the tax. It all starts with our dollars investing in or buying from a company. Further, if a corporation is offered stimulus money or tax incentives to build or expand, guess who pays. We do. So the next time someone suggests businesses pay more taxes, ask yourself how much it will cost you, because, in the long run, it will.

Opinions expressed here are those of the author and do not necessarily reflect the views of Andy Rapp, Q-TV, Delta College, or PBS.

About

Currently Speaking host Andy Rapp

Veteran journalist Andy Rapp has been hosting Currently Speaking since 1999.

Each week, he's joined live in the studio by journalists, academics, and experts. Along with viewers at home, they tackle the local, national, and global issues that matter most.