TheJOTUS

The Jim of the United States

An Economic Tidbit On Corporate Taxes

Posted by TheJOTUS on August 22, 2010

Another piece from Uncle Curtis.  I am thinking you guys are going to like him:

America has the 2nd highest corporate tax rate in the world.  I wonder who has the first?  Japan has the highest corporate tax rate in the world at 39.5%.   America has the second highest corporate tax rate at 39.3%.

First off, corporations do not pay taxes, consumers do. If you raise the property tax of a local utility that provides you energy, who do you think ultimately pays the taxes, you, or that energy company?

If you answer that the cost of those taxes are passed on to you, the consumer, in the form of a higher utility bill, you can move to the head of Dr. Williams’ class.

It matters not what the taxes are or in what form, when you tax a corporation, your cost for those goods and services are going to increase.

With the USA having a corporate tax rate of 39.3%, it is no wonder that our goods and services do not sell well. It also explains why the cost of imported goods (like at Wal-Mart) are less expensive than American made products.

Here is another way of looking at this.

If you don’t think that the customer pays the taxes, then you must think that the owner of the corporations (the shareholders) are paying the taxes, but the company is simply paying those taxes on their behalf.

So let’s go with this thought. Well, the corporation IS owned by shareholders. After the corporation has paid taxes on what they earned, they pay dividends on those earnings to the shareholder. The Shareholder, then pays taxes on the dividends, which they, as shareholders of the corporation have already paid taxes on those earnings. In this analogy, someone that owns a company (shareholder) is still going to have to raise the cost of goods and services to make the same amount of money that companies from other countries make, because they have been “double-taxed” that companies (owners) from other countries are not.

Bottom line, corporate taxes are what are called, “Hidden taxes”. But these “Hidden Taxes” are the most punitive taxes because they secretly cause prices to rise, reducing American production, while promoting the import of foreign goods and services.

THAT is why America is losing jobs to foreign countries.

—Uncle Curtis

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