In this age of expanding government participation in so many facets of our individual and family lives, it’s time to re-examine the various proposals to pay for the many new programs being touted by President Barack Obama and the U.S. Congress.
The shortfall in government revenue to meet the financial obligations put upon our society is usually met with a call for new taxes or a new tax structure, or both. However, one of the most popular ways is to put more of the tax burden on businesses and corporations.
I submit that businesses and corporations NEVER pay taxes anyway. Many reading this statement may call me wrong, or a radical, but please read on.
First of all, a corporation is made up of people; people who have invested their savings in corporate stock in the hope of the company making a profit sufficient to pay the stockholder a decent dividend on his or her investment.
In order to do this, the company must earn a profit. Without a profit there is no return for the stockholders and ultimately, no money to pay the employees. Without income, there are no taxes. Without tax revenue, a government has no funds for any program.
Winston Churchill said it well when he said, “Some people look upon profit as a predatory tiger to be shot. Others see it as a cow to be milked. Only a few see it for what it really is, the strong and willing horse that pulls the cart along.”
Furthermore, all corporate or business taxes become part of the cost of making the product and eventually show up in the cost of producing the product the consumer buys.
So, in reality, corporations don’t pay the taxes – they simply collect them and send them to the government.
To make it worse, every manufacturer and supplier must pay people to keep track of the taxes due, fill out the forms and send the payments to Washington and/or the various state capitals. These administrative costs to the companies become a part of their costs for the products we buy and the consumer simply reimburses the company who made the product at the time of purchase.
So, your taxes and mine and all those “embedded taxes” hidden in the cost of the product go to pay for all kinds of bureaucratic nonsense associated with this antiquated and out-dated system.
There have been several solutions suggested:
1. The value added tax. Each time in the manufacturing process when value is added to a natural resource, a tax would be added. You pay all the taxes as part of the price of the final product.
2. The national sales tax. Same thing, in a different format. Every business would collect a tax on what consumers purchase, keep track of it, report it, send it to Washington where bureaucrats would check to be sure all is correct. The valued added tax and the national sales tax would put a bigger burden on lower income families.
3. The flat tax. It has been estimated that a flat tax of between 17 and 20 percent on ALL personal income would be sufficient to run our needed government programs. There would be no deductions (or very limited deductions, perhaps for education.)
Everyone would pay except those at the poverty level, but even the lowest wage earner would pay some minor amount so that all would feel they are sharing something from their labors to help finance the operation of the government in the greatest nation on the face of this earth, blessed with the best form of government and best economic system ever devised, in spite of its imperfections.
Filing a tax return should be a simple procedure and should not require all kinds of forms or the need for an accountant or lawyer, or both.
So remember, all taxes, whether corporate, business or personal are paid by the consumer. That’s you and me. So why not just tax us in the first place?
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Art Holst is a motivational speaker and legend in the speaking industry. His broad background provides the foundation for his messages spiced with inspiration, humor, and poetry. To learn more about Art, visit https://www.speakersoffice.com/art_holst.asp or http://www.artholst.com/.
