corporations fight tax increases? And a final point: if corporations fight tax increases because they are worried that higher prices will decrease sales, doesn't that simply illustrate the point I'm making--that corporations themselves bear part of the burden for taxes they pay?
I see this argument all the time on Yahoo! Answers:
"Corporations don't REALLY pay taxes. If you increase corporate taxes, the corporations will simply increase prices on products, so consumers end up paying all corporate taxes."
If that is true, why do corporations routinely oppose tax increases and find any way possible to minimize taxes?
Isn't it obvious that the the consumer is not willing to pay whatever corporations charge for products, and that, as a result, a corporation may respond to increases in taxes by:
1. Decreasing dividends;
2. Increasing prices on sales of foreign, not U.S. goods;
3. Cutting employees;
4. Cutting executive compensation or reducing the number of executives;
5. Structuring itself so as to minimize tax expense by reducing retained earnings and/or increasing deductible expenses?
Where does this silly argument that consumers bear the burden of ALL corporate taxes come from? It flies in the face of the most basic economic principles doesn't it?
FYI: Chinese corporations pay the same taxes on income earned from sales of US goods that US companies pay. This is under section 881 of the Internal Revenue Code.
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