Friday, April 09, 2010

Business taxes: who pays?

I've been meaning to highlight this quote from Aetna CEO Ron Williams on the impact of health care reform for a couple of weeks:
Will insurance premiums go up?
The answer is yes, and some of the things that will drive those premiums are significant additional taxes the industry will ultimately have to pay in the first year.
I suspect that a good number of people who favor high business taxes do so because they see such taxes as being borne by a faceless, non-human entity. Corporations and businesses, however, are not big machines but groups of people linked together in some commercial enterprise. When their taxes raised businesses must respond by either reducing their own expenses in the form of reduced pay to employees and shareholders, by passing costs along to consumers (the more likely scenario), or some combination thereof.

Increasing taxes on business is an increase in taxes on all of us. The impact is simply less apparent.

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