Why there is no such thing as a corporate tax

 

Corporations Don’t Pay Corporate Taxes. People Do.

First, corporations do not pay any corporate tax — individuals do. That is because companies pass on their costs. Some of the tax is paid by consumers, who pay higher prices. Company employees pay some of the tax through lower wages. And investors’ retirement accounts pay some of the tax through lower returns. ...

 

In a 2020 study by Scott R. Baker of Northwestern University, Stephen Teng Sun of City University of Hong Kong, and Constantine Yannelis of the University of Chicago estimate that 31 percent of the cost of an increase in corporate taxes is borne by consumers, 38 percent by workers, and 31 percent by shareholders, or about a third each. Other studies have found different ratios. A 2020 Tax Policy Center study, a joint effort between the Urban Institute and the Brookings Institution, estimates an 80–20 split between investors and labor. The Tax Foundation’s Stephen J. Entin estimated in 2017 that labor pays 70 percent or more of the corporate tax. Differences aside, these studies share a common conclusion: Ultimately, corporations themselves pay no corporate tax.

And you know what? There is no way to make them. I do not mean the government should not make them pay it, or must not make them pay it. I mean that the government cannot make them pay it for one simple reason: corporations have no money of their own. Every dollar they pay in corporate taxes has to come from somewhere. Unlike the government, corporations cannot print their own money. 

This is not where Amazon gets its money:

This is:

When the administration says it will raise corporate tax rates, what it really means is that it will raise your personal tax rate through indirect means. Make no mistake, this is not a tax on Amazon or Kroger or Tesla or Apple. It is a tax on 

• all of us who shop there or anywhere else, paid through higher prices, 
• everyone who works for any company subject to the tax, paid by lower wages and salaries,
• any retiree whose retirement funds include those companies from lower returns (which means every retiree with a 401(k) or any other private pension fund),
• every American regardless of age or income because the effect will also lead to higher inflation because higher consumer prices will not be matched by higher supply of consumer goods.

But we voted for it last November, so all is well, right? After all, "Democracy is the idea that the common folk know what they want and deserve to get it good and hard" - H.L. Mencken.