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Corporations do not pay taxes … period

Corporations do not pay taxes … period

I have written about this in the past, but I am amazed how the tax-and-spend Democrats completely bamboozle the public into believing that businesses do not pay their fair share of taxes – or pay taxes at all.

Allow me to stress the point.  BUSINESSES DO NOT PAY TAXES … EVER.  YOU AND I PAY THOSE TAXES WHEN WE BUY STUFF.  If you hire a lawyer, you pay the taxes that the law firm pays.  You pay the taxes of their landlord.  You pay the taxes of their suppliers and subcontractors.

The only thing that is taxable is the productivity of human beings.  It is generated from the wealth a person earns as reflected in their paychecks. 

When the progressives in Washington tell you that they are “sticking it to the big corporations,” they are actually sticking it to you.  ALL TAXES ARE INCOME TAXES.  If you think there is such a thing as a property tax, the next time you get the bill send them to your garage.  You pay it out of your income.  Duh!

It is very simple. Taxes are part of the cost of doing business.  Taxes are found on the expense side of the corporate balance sheet – along with wages, supplies, insurance, rent, legal fees, accounting fees, etc.  Prices are then set to cover the expenses and produce a profit in the competitive marketplace – a profit that promotes investment.

The public seems to be aware of the reality when it comes to things like gas.  We know that an increase in a tax on gas results in an increase in the price at the pump.  Why people do not understand that the same thing applies to every purchase we make?  When you buy a shirt or blouse, you pay all the taxes that the supply chain accrued along the way – not just the sales tax.

We see the sales tax on the receipt, but we do not see all the taxes that are built into the price. In most cases, it is greater than the sales tax.

Progressives hide the fact that ANY increase in business taxes hits hardest on those in the lower income brackets.  It is a regressive tax.  If you are wealthy, adding a few dollars of hidden taxes to your purchases is meaningless.  But it means a lot to those living near or below poverty levels.  (And let us not forget that those who impose the taxes on we the people are members of the wealthy establishment who do not suffer the consequences of their actions.  For them it is meaningless.)

So … Biden just passed a 15 percent minimum tax on companies earning more than a billion dollars annually. He says it is not a tax increase – merely a minimum tax.  Only Biden would try to sell that crap – just like he calls his so-called Inflation Reduction legislation anti-inflation when the Congressional Budget Office and virtually all economists say it will do nothing to stem inflation.  Some say it will increase inflation.  Personally, I agree with the latter.

Whatever Biden calls it – or does not call it – the reality remains the same.  It is an increase in the cost of doing business – and it will be passed on to the consumers.  And if you think that will not affect the little guy, guess again.  These billion-dollar corporations Biden is taxing provide a lot of everyday consumer products.  Billionaire Warren Buffett owns 65 companies – including GEICO insurance and Dairy Queen.  Your next ice cream cone will be paying for Biden’s business tax increase.

When the progressive politicians tell you that they are sparing you from more taxes by sticking it to the corporations, they are lying. If you believe them, you are a …  well, you know.

So, there ‘tis.

About The Author

Larry Horist

So,there‘tis… The opinions, perspectives and analyses of Larry Horist Larry Horist is a businessman, conservative writer and political strategist with an extensive background in economics and public policy. Clients of his consulting firm have included such conservative icons as Steve Forbes and Milton Friedman. He has served as a consultant to the Nixon White House and travelled the country as a spokesman for President Reagan’s economic reforms. He has testified as an expert witness before numerous legislative bodies, including the U. S. Congress. Horist has lectured and taught courses at numerous colleges and universities, including Harvard, Northwestern, DePaul universities, Hope College and his alma mater, Knox College. He has been a guest on hundreds of public affairs talk shows, and hosted his own program, “Chicago In Sight,” on WIND radio. Horist was a one-time candidate for mayor of Chicago and served as Executive Director of the City Club of Chicago, where he led a successful two-year campaign to save the historic Chicago Theatre from the wrecking ball. An award-winning debater, his insightful and sometimes controversial commentaries appear frequently on the editorial pages of newspapers across the nation. He is praised by readers for his style, substance and sense of humor. According to one reader, Horist is the “new Charles Krauthammer.” He is actively semi-retired in Boca Raton, Florida where he devotes his time to writing. So, there ‘tis is Horist’s signature sign off.


  1. JoAnn Leichliter

    I have been explaining to people for decades that corporations don’t pay the “corporate tax.” This is because, lacking the authority to print money, they have to get it from their only source: the customer. The corporate tax is the biggest tax hoax ever perpetrated by a government; it’s the clever way of taxing you at least twice.

  2. Rat Wrangler

    Eliminating the income tax on businesses will probably not decrease prices, nor offer any incentive to them to pay their employees better. The only way to effectively reign them in would be to either cap profits, or to tax the shareholders at the standard tax bracket, but all of their incomes, not just salaries. Since we would be losing out on some tax dollars by not taxing the businesses, we could shift that to an import tax on all products and materials that could be made or found here, but are not. As businesses move more production back to our shores, the employee income taxes should more than make up for the lost money.

    • Patrick

      You haven’t read the “Fair Tax” book then. A survey of 100 top companies in the US said they would lower their prices if the tax structure was changed accordingly. It got a bad rap because the media changed the formula from the book in order to demonize it as they always do with things they don’t agree with. It is a good insightful read as it puts all people into the tax base, even drug dealers who deal in cash since they still need to buy essentials.

  3. john fudacz

    how many democraps and so call religious leaders dont pay their taxes

    • Kawika56

      Please use the proper terms, they are not democraps, they are demokrauts

  4. Kawika56

    Here in America, corporations and businesses do NOT REALLY PAY Taxes, they treat taxation as just another Business Expense and just pass the costs down-line at every step in the process… from raw material to the finished product in the store. Thus they just raise their prices to cover the cost, It is the Consumers that actually pay for it all.
    But there comes a point that Corporations and business can’t raise their prices anymore and still maintain competitiveness with foreign competition.
    Because it is cheaper to relocate USA businesses overseas, than to pay United States Business Taxes, (the highest Corporate tax rate in the WORLD) All those container ships coming into the USA are loaded to the gills, then all but a measly few leave the USA EMPTY, to only be refilled again overseas. Thus, bleeding the USA’s wealth dry, by millions or billions with every ship coming in!

    • larry Horist

      As long as we tax corporations the way we do, we will never compete with foreign markets. And remember all those high wages the auto unions brag about enabled the foreign competitors to flood the US market — and force the Detroit crowed to start manufacturing overseas. American cars on the road are the equivalent of albino rhinos. Tariffs can keep out the foreigner but will force us all to pay a LOT more for just about everything,

  5. frank stetson

    Kawasaki: While you are right that the cost of product goes into the price, the thought that it’s a direct correlation is bogus. Hardly anyone uses cost-plus pricing which is what you are suggest. IF we hit someone that does not pay taxes with a 15% tax bill, I guarantee that the prices don’t all rise by a fixed amount to cover the 15% — it’s a little more strategic than that.

    In other words, they don’t just pass the costs down the line, they WILL recoup most, if not more than most, of the new cost —- but not is a straight line for all products. They may even suck-it-up if, for example, their profit margin is higher than their competitors and it’s a competitive market.

    Their is also the theory of price stickiness which slows the timing and reaction to cost increases. Otherwise we would be faced with a different price every five minutes as costs constantly change. Plus there’s all sorts of pricing within a product too.

    For example, I had a product handling 20 people. The first unit did ten and cost $1,500 with a 10% margin. To go to the full twenty, you gave me only another $1,000, a deal, but the unit costs me $.17; that’s right, 17 cents. I had a 40% take rate on the second unit so my average price was $1,900 and a margin well above 10%. It was a margin leader for the company, too bad the volumes made it irrelevant. But I did not price for a flat-margin, I did not price for cost, I prices for the market where I was still the cheapest game in town due to invention. And no amount of taxes would have changed this price. No way UNLESS a corporate edict and in 35 years I had never seen one of those.

    Pricing strategy is not cost-plus, and the final price faces the market, taking cost into account, but not the only factor. Customers, competition, all sorts of things affected my price. Cost was just a hurdle I had to clear and generally I had plenty of buffer to weather a single-digit cost increase like these taxes could be.

    Second, IF the reaction of these business was to move their manufacturing overseas —- uh —– they are taxed based on US revenues — that does not change. Not at all. Matter of fact, using your own theory — that would lower costs and they would immediately lower all prices by that flat amount. Not bloody likely, but it’s your theory.

    Third, the idea that this is being paid as income tax again uses a cost-plus theory which is simple, but the truth is much more complex. That’s as ludicrous as saying your taxes lower your salary by that exact amount when, indeed, your salary is based on market conditions for your talent, not direct costs. If taxes go up, trust me, you’re not getting a raise.

    Yes, we get taxed many times on each dollar. Try a pre-paid tax IRA inherited and impossible to trace the taxes due to timing, bank mergers, etc. That money was taxed as income, pre-paid tax on the IRA, inheritance tax on the transfer, and then taxed one more time on redemption. If you buy something with it, you pay a sales tax to boot. That’s taxed five times.

    Fact is our dollars can be taxed many times. We tax income, we tax property, we tax sales, we tax business. No matter what, we still need the cash to run our government and all it does. If we simplified by removing, say business taxes, we would just have to make it up in another tax, like income. But this way, people who buy stuff get their dollars taxed more time, those who don’t, don’t. Might not be perfect, but works for me and simplifying it to income only gonna make for a terrible Christmas because Scrooge ain’t giving you a raise for that one.

    • Joe Gilbertson

      Frank, you seem to lack a conceptual understanding understanding of business and economics.

      • Frank stetson

        When you can’t argue your points, attack the man. And then just hit em with generalities, a broad brush prrsonal attack without support or substance. .

        Business and finance, more credentials than your cia junket.

        Economics not so much so.

        But this is not about economics except for the theory of price stickiness which exists imo. The discussion is about pricing which, for my industry, at one point I was the best in the world. I spent my first year at this corporation, in the entire year, repricing their entire product line, souped to nuts. Over 10,000 pricing elements, Big fish, small pond. Worked with McKenzie as they did a huge million dollar statistical analysis which derived price points that were than 5% of my original estimate. That made me pretty proud.Then I managed products, product lines, and even entire portfolios for a fortune 100. I owned the pricing. I owned the number to product line in his fortune 100 company, in other words the second best job in the company, and totally responsible for all the pricing.

        I am sure based on pricing strategy, I am sure based on practical usage. There is just no need for you to be nasty if you can’t to the line and construe a decent discussion. ,

    • larry Horist

      Frank Stetson … you are correct that every corporation hit with the 15 percent tax increase has a different profit situation and competitive market strategy. Same may absorb the increase for a short time. Other will not have that luxury. If they do not maintain profit margins, they lose investors. But as sure as the earth spins, all that extra cost will find its way into the price tag. That is why taxes are list as expenses no different than wages and accounting fees. Price stickiness — which only means the price increase may not be seen in the price tag on the first day of the new tax, but it will rather soon. And remember, when the prices increase depends on who much old stuff a company has in the warehouse. Example … a gas station that has full tanks when hit with a price increase may hold the price for awhile. But a station with empty tanks will be changing the price on the signs rather quickly. Do not confuse the dynamics of corporate pricing with a permanent fixed response. It is not a matter of IF companies will pass along the 15 percent tax increase, but when.