Friday, May 22, 2009

Corporate taxation is just sales tax.

Let's get something straight. When there are two options presented and one is tax people and the other is tax companies, they are really the SAME THING. Huh? How can this be? I mean, on the one hand, money comes out of my pocket and goes straight to the government. On the other hand, money comes from big corporations that are making BILLIONS and goes to the government. So taxing them instead of me is good. Right? Wrong. They're still taxing you.

Think about this for a second. Companies are built to make money. That's the purpose. Small companies make money for their owners, bigger businesses make money for their investors. Okay, fine. Can't we just let the government take some of that money? Sure, we can, and we do. But where does it really come from? Most of the time, corporate taxation is leaned toward the big companies because they have the bigger profits to take a percentage of. The companies with the investors. Why? Because they are an easier target. They're busy trying to make the next quarter earnings projections and generally not paying attention to lawmakers. Small business owners, however, would go nuts if you tried to touch THEIR profits. Why? Because that's what they generally pay themselves with. And when they pay themselves the government gets income tax. So it's pretty obvious that if the government dips the company first and then dips the owner's salary, well, they are double dipping.

Now apply that logic to big corporate taxes. Same thing. Only they get away with it. Okay, still, you say fine, those big investors are making big money so they can afford to get double dipped. But that's not the way it works. Those companies are under the same pressure to grow and make money whether they are taxed or not. The only way they can grow and make money is to recoup that tax from somewhere, and that's through charging more to customers, period. End of story. That's where the money COMES FROM. It's more important to look at where it comes from than where it's going in this case. Because it comes from OUR POCKETS. The consumers. And to get that tax paid means WE PAY IT. The investors still have to see their expected return rate or they won't invest and the company will die. So where does that shortfall have to come from? The income side.

So, when the government says they're not going to increase YOUR taxes but instead are going to go after the "big corporations", don't fall for it. They're taxing you right behind your back. The worst part is they're going after companies that may not be able to fight it up front, but once the tax laws are passed they will most certainly spend a LOT of money working around those same laws. There is an entire industry out there of corporate tax services, attorneys, and even huge companies who LOVE to see these things passed. Why? More work for them. But think about this for a second. Sure, it's good to create jobs in some ways, but is it REALLY good to create jobs that do NOTHING but try to circumvent the same government that created the job to begin with? To me that's nothing more than wheel spinning, and it is yet another thing we've now CREATED that does nothing to actually help the overall economy. No product is produced for export. No product is produced for consumption. At the end of the day the people in those jobs exist only because the government created a sandbox for them to play in.

A very expensive sandbox at that.

1 comment:

Em said...

i've always wondered who actually thinks that corporations are benevolent and that they're taking pay cuts or something else to cover the tax hikes...