Corporate Taxes : Consumers & Workers Pay

That the public continually understands that corporations don't pay any income tax is a direct result of the media. Where else would the general public get the information that they need to make informed decisions?

Little wonder then why the general public is so misinformed unless they watch FOX News. 'They report and then the public decides' but the main stream media, the letter channels and most printed media, have other ideas about reporting the news and just who gets to make the decisions.

But the bottom line is a matter of perception of the truth, which is the very basis of the ideology of the main stream press. It's formula that has worked for decades for the press, managing the news to support an agenda, and in this case, it's the agenda of the progressive democrats.

Little wonder then the belief among the masses that corporations are villains as this is how they are portrayed in the press. That the corporation do pay taxes is of little concern to the individuals that wish them harm.

So it's not about the truth, it's about the perception of the truth, and for the most part, perception is reality.

Who Actually Pays Corporate Income Taxes?
Source: Philip Cross, "Corporate Income Taxes -- Who Pays?" Fraser Institute, January 2014.
February 24, 2014

Regular people are the ones who ultimately pay corporate income taxes, says Philip Cross of the Fraser Institute.

When governments need a revenue source, many people turn immediately to corporations, thinking that the corporate income tax is an easy way to bring in more money. Many see the corporation -- a big, profitable business that can stand to pay the taxes -- as an ideal revenue source. But it is ultimately consumers, workers and investors who bear the cost of corporate income taxes:

• A corporate income tax is already a form of "double taxation," as corporate profits are already taxed when they are paid out in dividends.
• The tax also hurts workers. When corporations face a high income tax, they take steps to offset that cost, often by lowering labor costs. This could mean lowering wages or even shifting operations to places with lower taxes, causing workers to lose jobs entirely.
• Lastly, corporations can also choose to offset their taxes by increasing their prices, passing on the tax to consumers in the form of more expensive goods and services.

Despite the fact that the corporate income tax is always passed on to individuals, it has proven a difficult argument politically, as people are persist in their belief that it is unfair to allow corporations to operate untaxed. If abolishing the tax is politically impossible, at the very least, governments should seek to lower the income tax on corporations as much as they can.

Every percentage point increase in corporate tax rates erodes the tax base. In fact, one study found that every one point increase in tax rates results in a drop of 13.6 percent in the corporate tax base. This illustrates how easily businesses can simply move their operations to lower-tax jurisdictions to avoid paying exorbitant rates.

The biggest hurdle to overcome in resolving the corporate income tax situation is public perception of the fairness of corporate income taxes.