The Myth of Corporate Taxation

Let’s expose this myth post haste.  Corporations don’t pay taxes—only people do.

Any tax increase imposed on a corporation or business is passed along in one or more of these three ways.  First, the business can raise its prices to cover the tax increase.  Second, it can take a hit to the bottom line (earnings) of the business.  Lastly, and most likely, the tax increase will fall on employment levels.  The company will either cut back on hiring or lay-off employees to protect its earnings and shareholders.

In light of this, the Obama’s administration proposal to tax the overseas earnings of U.S. corporations (by increasing their taxes by $122 billion over the next decade), will further disrupt the goal of reducing our unemployment levels.  Worse yet, to escape this punishing tax increase, many U.S. companies will move their corporate headquarters overseas.

All this proves the old saying that the power to tax is the power to destroy—U.S. jobs in this case.  Bad policy, even for the best of reasons, is still bad policy