The U.S. has the second highest corporate tax rate in the world, pushing nearly 40 percent. My hypothesis is that this occurs because taxing corporations is preferable to taxing individuals. Corporations, after all, do not vote and I imagine plenty of people see it as a great way to stick someone else with the bill.
But who really pays corporate taxes? Certainly it does not come out of some giant mattress corporations keep their money under. A dollar taxed away from a corporation is a dollar less which is available to pay employees, reward investors or develop new products. In other words, we still end up paying. Rather than writing a check directly to the government, however, we simply pay in the form of raises we don't get, less money earned on our investments (which affects a lot of people given the widespread nature of 401k accounts) and reduced competitiveness (with less money for research and development) which could result in layoffs.
Even in tax policy, there is no such thing as a free lunch.
But who really pays corporate taxes? Certainly it does not come out of some giant mattress corporations keep their money under. A dollar taxed away from a corporation is a dollar less which is available to pay employees, reward investors or develop new products. In other words, we still end up paying. Rather than writing a check directly to the government, however, we simply pay in the form of raises we don't get, less money earned on our investments (which affects a lot of people given the widespread nature of 401k accounts) and reduced competitiveness (with less money for research and development) which could result in layoffs.
Even in tax policy, there is no such thing as a free lunch.
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