June 21, 2010
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WE ALL PAY!
Taxes levied on business tend to find their way to customers, workers and anyone with a 401(k). In other words, you and I will be the one paying taxes that are supposed to hit Wall Street.
The Congressional Budget Office (CBO) evaluated the proposed tax on banks and financial institutions and concluded that big banks wouldn’t bear the burden. They would merely pass the cost of the tax to their customers, employees and investors.
For example:
- Customers would pay the tax through higher borrowing rates and other fees.
- Bank employees might see their compensation fall.
- The fee would probably lower the total supply of credit in the financial system to a slight degree.
- Less credit for small businesses will make it harder for those businesses to grow and expand, and — most importantly given our near double digit unemployment rate — to hire workers.
Anytime government levies a tax, it takes money out of the private sector. Taxes on corporations never just hit some boogeyman called “big business.” Businesses are ultimately people: customers, employees and investors. We end up paying those business taxes, even when they are officially directed at unpopular entities from Wall Street to oil companies. An example is the “taxes on millionaires” — a policy being considered in many states and localities facing budget gaps, says Lukas:
- Certainly, some millionaires will pay higher taxes; however, that means they’ll have less to spend on goods and services and less to invest, which hurts businesses, their employees and ultimately all of us.
- And millionaires can relocate; when taxes rise in one city or state, many of these highly mobile individuals will leave — taking their money and consumer power — in favor of a lower-tax jurisdiction.
So forget the politicians’ con game on the public – businesses don’t pay the taxes, they are just passed on to us in the form of higher costs. Whenever government raises taxes on business, our paychecks are worth less.
Comments (3)
Argh. Taxes. We need to find a better way to tax people fairly across the board.
Taxes on people’s pays are ridiculous. I am okay with paying taxes when I am buying an item, but taking away my earned money just drives me nuts.
@warweasel -
@nickichica -
The answer is the Fair Tax Bill. It abolishes the income tax and the IRS. There will no longer be federal deductions on your paycheck. The income tax would be replaced by a national sales tax. Layers of taxes would be removed from goods and services making them cheaper and those people who don’t pay income tax now would pay taxes on their purchases.