It has always struck me as very peculiar that the public seems to enjoy it when taxes are raised on corporations instead of individuals. You can almost hear the sounds of delight, the cheering that is associated with the thought that those fat-cats can afford it, and feeling that they earn so much money they should pay more, or perhaps just the basic thought that it is better for them to pay than us. This somehow gives gratification to our citizens that the Government is protecting them and simultaneously making those corporations pay their fair share. It also serves the Government very well by increasing the revenue collected and making the public believe that someone else is paying it.

Technically, corporations do file and pay taxes, but in reality they are nothing more than a conduit that transfers taxes to the Government after collecting them from consumers, and the beauty lies in that the public does not really recognize this actuality. This is a form of misdirection that gets the attention focused on one thing to distract attention from another. It is only the public that pays taxes, a corporation or any other business for that matter, is just a collection of people working to provide a product to offer. All the costs of producing that product including taxes owed are worked into the price along with a sufficient profit to arrive at the offered price to the market. Any increased costs they incur whether that is higher taxes, materials, rents, or governmental regulation are simply embedded into their price before it is offered to consumers. Corporate taxes are nothing more than a means for the Government to collect more taxes over and above the direct tax that they already collect from individual citizens. Corporations are not in the business to pay tax; their purpose is to produce a product that will generate a profit after all associated costs are covered. If a profit can not be attained by investing money and employing people in a productive enterprise, then that activity simply ceases to exist.

This same concept applies to any cost the Government chooses to levy on the corporations whether it is taxes or increased regulations such as the flawed recent proposal called cap-and-trade. This program is designed to limit carbon emissions by issuing tradable credits, and it is estimated that approximately $640 billion will be raised over an eight year period if this program is approved. You can be absolutely sure that these added costs will not be paid by the businesses providing the products subjected to these regulations, they will simply be passed on to the consumer. This is not to insinuate that corporations or any other businesses are tax evaders or recipients of preferential tax treatment, it is merely recognizing that it is truly only individual citizens that pay tax in society whether that is through direct payments to the IRS or through the goods and services they purchase, in either case the Government is indifferent as it serves to maximize revenue. The case can also correctly be made that foreigners share the tax burden as well because they are consumers of the same products, but it also works in reverse with us buying their products. The perception of corporations paying taxes serves as an effective means for the Government to capture more tax revenue from individuals without it being perceived as such. With this in mind, the next time we hear that tax policy is going after corporations or any other businesses to pay their fair share then perhaps we should withhold the cheer with realization that it is just coming out of our own pockets.