In attempting to pass both the bipartisan Infrastructure Bill – the one that deals with real infrastructure and the so-called “human infrastructure” bill – that is really a huge welfare program – the Democrats are relying on the ignorance of the public. They are fueling that ignorance by lying about the legislation – the cost, the purpose, and the ultimate impact.
President Biden brags that his huge expenditure legislation will be completely paid for. The costs are all covered by what they claim are taxes on the super-rich and corporations. Not true.
The first thing to understand is that all the White House projections will be wrong. The costs associated with the various programs will be higher than projected and the income from the various tax schemes will be less than projected. We know that because that is virtually always the case.
Sticking it to the wealthy is a good political ploy — playing into class warfare. I have long been a proponent of closing many of the loopholes used by wealthy people to minimize their personal tax liability. I have been of fan of magazine publisher Steve Forbes’ flat tax that fix a rate for all taxpayers with very few deductions. Unfortunately, what Democrats do not admit in their calculations is that even the rich do not have enough wealth to put a dent in the federal budget, the deficit, and the National Debt – much less pay for Biden’s crazy legislation.
Democrats then go after the corporations – demanding they pay their “fair share.” What they do not tell the public is that corporations never pay taxes. The tax is treated like any other expense and passed on to the consumer.
The public seems to know that when there is a tax added to gasoline, the price at the pump goes up. So, why does the public fall for the nonsense that the corporations and businesses pay those other taxes? They are merely the transfer point – taking the money from the customers and sending it to the government.
The public well understands that corporations withhold the tax money owed by employees and send it on to the government. The public understands that the sales tax that is charged at the point-of-purchase is collected by the business and sent on to the government. Corporations collect the Social Security tax from employees – and then pays its portion – and BOTH are put on the expense side of the balance sheet and paid by … yep … the customer.
Biden and his Democrat flimflammers say that the $3.5 trillion … or the $6 trillion … cost of the Reconciliation Bill will not be put on the middle and lower classes. Really?
The non-partisan Congressional Joint Committee on Taxation has determined that the middle and lower classes will bear TWO-THIRDS of the tax burden for the Biden legislation. And the liberal-leaning Tax Policy Center calculates that the middle class will bear 70 PERCENT of the tax burden.
They both arrive at that figure by including what the consumers will pay when they purchase goods and services from corporations and businesses. They understand that corporations only pass the cost of the tax onto the consumer.
The worst part of this indirect tax is not just that it is a fooler for much of the public, but it is a regressive tax that hits hardest on the folks with the lowest incomes. It is the opposite of “soaking the rich.”
When the scam of corporate taxation was brought to the attention of White House Press Secretary Jen Psaki, she called the information “unfair, absurd … the people will not stand for that” — “that” being the corporations passing the tax onto the consumer.
Of course, the people have no ability to force corporations to absorb the tax – and no corporation can survive if it cannot incorporate ALL expenses into the balance sheet. Some businesses may not immediately increase prices as a means of gaining a short-term competitive advantage. But they will be in the cost structure soon enough.
Over the course of the past 50 years, I have frequently written about the fallacy of corporate tax. It amazes me that so much of the public does not get it. And Democrats take advantage of that ignorance and reinforce it.
If you want to support the Democrat’s over-the-top tax and spend policies, that is your right. If it satisfies you to tax the bejeezus out of the business community, that is your right. Just do not be stupid and believe that YOU are not paying the tax.
So, there ‘tis.