Can we just get one thing straight here? Corporations do not pay taxes. Individuals pay taxes. If the tax bill on a corporation is increased, the corporation simply raises retail prices to cover their cost of taxes.
If taxes on corporations were eliminated entirely, prices would drop, sales would increase, and sales tax revenue would increase. For example: I recently purchased domestic round trip airfare. The advertised price was $119 each way (including over $16 in excise taxes), a total of $238. I bought four tickets. Total should be $952. Right?
No. You’re wrong. Added to the airfare was another $3.70 per segment per person in excise taxes. So for me alone, that would have meant another $18.50 in excise taxes (since there were five segments on the trip); for the four tickets, it meant $74. Add a Passenger Facility Charge (for our use of the airports) of $13.50 per person ($54), and a government-imposed “September 11th Security Fee” of $7.50 per person ($30), and the $119-one-way fare turns into $1110 round trip for a family of four. $170 of that is government fees and taxes ($224 if you count the facility charge as a government fee, since most airports are managed by local government boards or commissions). So between 15% and 20% of the cost of airfare is made up of government fees. This is after I've already paid a tax on earning that money -- Now I have to pay another tax to spend it! (More accurately, of course, the airline has to pay taxes on it, so they just recover it from me.)
Wait a minute! Why do I have to pay that? Shouldn’t the airline be paying that? Well of course, silly, and they do. They’re just the middle-man between your dollars and the US government treasury. They’re charged the fees; they recover it from you by including it in your airfare. And by itemizing the fees on your cost and payment summary, they make sure you know it isn’t their outrageous costs that are making it so expensive to visit your family across country. It’s the government.
Those who advocate elimination of all oil “subsidies” obviously do not have a clear understanding of economics. Research subsidies should be eliminated: Let the private sector absorb the cost of deciding what will provide the greatest return on investment. But tax provisions should not be eliminated. (In fact, if I had my way about it, those who provide America with the means of propelling our vehicles would have no tax burden at all. Nor would our soldiers.)
In the first quarter of 2011 alone, ExxonMobile earnings on operations in the US were $2.6 billion, but they paid over $3 billion in US taxes during that same period. Does that sound equitable to anyone? It doesn’t to me, either. (By the way: “profit” is different than a “profit margin,” which is different than “earnings.”) (hat tip: Neal Boortz)
Eliminating the California tax on each gallon of gas would reduce the price of each gallon sold in California by about 35 cents. Want more reduction in cost? Open up additional areas of exploration and collection. Want to see less air pollution as a result of vehicle emissions and better roads? Build toll roads that are self-sustaining. Want to see our economy rebound? Eliminate government expenditures that seek to equalize financial status among demographic groups.
And in case I wasn’t clear above, I am advocating massive elimination of government programs that take money from someone who has earned it for the sole purpose of distributing it to someone who has not earned it. Government’s proper role is limited to protecting me from predators. If they’re taking my income and giving it to someone who doesn’t work, I’d say that government has taken on the role of predator and that I’m the victim.
That’s my 2-cents worth. Your thoughts?
