Taxes upon corporations have sales tax like effect.

Oct 2009
548
105
Cliffside Park, NJ
Taxes upon corporations have sales tax like effect.

Political conservatives are more likely believe those whose incomes are insufficient to be subject to federal income tax, pay no federal taxes and contribute nothing to USA's economy.

They're also likely to be opposed to corporate taxes and point out that customers, not businesses pay businesses taxes. To a substantial extent that's true. Then although not everyone pays federal income taxes, due to everyone directly or indirectly inducing purchases, don't we all pay some federal taxes?

To the extent that all of our purchasers have some federal taxes upon enterprises embedded within their prices, among those taxes consequences is their effect similar to a flat federal sales tax. Taxes embedded within purchasers are direct or indirect contributions to governments' revenues that we all pay.

While we retain federal taxation of individual's net incomes, we should also retain corporate taxes. Elimination of corporate taxation would hinder enforcement of income taxation upon individuals and would greater contribute to tax inequality.

Respectfully, Supposn
 
Feb 2018
2,711
1,973
Oregon
However....

"Probably most people assume that the corporate income tax is largely paid by consumers of its products or services. That is, they assume that although the tax is nominally levied on the corporation as a whole, in fact the burden of the tax is shifted onto customers in the form of higher prices.
All economists reject that idea. They point out that prices are set by market forces and the suppliers of goods and services aren’t only C-corporations, which pay taxes on the corporate tax schedule, but also sole proprietorships, partnerships and S-corporations that are taxed under the individual income tax.

"Therefore, corporations cannot raise prices to compensate for the corporate income tax because they will be undercut by businesses to which the tax does not apply. It should also be noted that the states have substantially different corporate tax regimes, including some that do not tax corporations at all, and we do not observe that prices for goods and services vary from state to state depending on its taxation of corporations.

"That leaves two remaining groups that may bear the burden of the corporate tax: workers and shareholders
."

More here.
 
Oct 2009
548
105
Cliffside Park, NJ
However....

"Probably most people assume that the corporate income tax is largely paid by consumers of its products or services. That is, they assume that although the tax is nominally levied on the corporation as a whole, in fact the burden of the tax is shifted onto customers in the form of higher prices.
All economists reject that idea. They point out that prices are set by market forces and the suppliers of goods and services aren’t only C-corporations, which pay taxes on the corporate tax schedule, but also sole proprietorships, partnerships and S-corporations that are taxed under the individual income tax.

"Therefore, corporations cannot raise prices to compensate for the corporate income tax because they will be undercut by businesses to which the tax does not apply. It should also be noted that the states have substantially different corporate tax regimes, including some that do not tax corporations at all, and we do not observe that prices for goods and services vary from state to state depending on its taxation of corporations.

"That leaves two remaining groups that may bear the burden of the corporate tax: workers and shareholders
."

More here.
Kode, thank you for responding, I had assumed that no one was interested.
I doubt if a majority, or a substantial minority of credible economist believe that enterprises do not generally pass their ordinary expenses on to their customers; corporate income taxes are ordinary corporate expenses.

As to who eventually pays an enterprise’s taxes based upon its income, (or gain, or profit), that’s determined by those managing the enterprise and I suppose it’s often not entirely paid for by the enterprise’s customers or its owners. Enterprises profit-margins and their prices are certainly related; generally increasing one, reduces the other.

There are taxes levied directly upon employees, but enterprise’s taxes are not paid by employees. Corporations may, for political purposes to appear that they increase wages in response to a reduction of their taxes. But that’s not the usual case. Enterprises do not usually increase their employees wage rates in response to a corporate income tax reduction, nor do they reduce wage rates if corporate income taxes are increased.

I do agree that prices are set by market forces, but corporate income taxes are among those market forces.

Respectfully, Supposn
 
Feb 2018
2,711
1,973
Oregon
Kode, thank you for responding, I had assumed that no one was interested.
I doubt if a majority, or a substantial minority of credible economist believe that enterprises do not generally pass their ordinary expenses on to their customers; corporate income taxes are ordinary corporate expenses.

As to who eventually pays an enterprise’s taxes based upon its income, (or gain, or profit), that’s determined by those managing the enterprise and I suppose it’s often not entirely paid for by the enterprise’s customers or its owners. Enterprises profit-margins and their prices are certainly related; generally increasing one, reduces the other.

There are taxes levied directly upon employees, but enterprise’s taxes are not paid by employees. Corporations may, for political purposes to appear that they increase wages in response to a reduction of their taxes. But that’s not the usual case. Enterprises do not usually increase their employees wage rates in response to a corporate income tax reduction, nor do they reduce wage rates if corporate income taxes are increased.

I do agree that prices are set by market forces, but corporate income taxes are among those market forces.

Respectfully, Supposn
Yup HOWEVER, take it from a billionaire. It's just 17 minutes long.......