Taxing corporations ends up taxing people

Corporations have never paid taxes and never will. People pay taxes. For example, the federal government informs all car companies that tomorrow there is a special tax of $1,000 on every car produced. What do the companies do to maintain profitability or sustainability going forward?

Raise car prices. Who pays? The customers (we the people buying cars). (Or):

Lower the expense of product by lower wages or let employees go (employees pay).

Lower the quality of materials used in the product (less expensive brakes), customers pay by receiving lower quality).

Lower the cost of management (employees' affected pay).

Lower the return to shareholders, which could remove the company's ability to ever raise needed capital in the future (the shareholders pay).

Eliminate funding of development and research (all people pay, perpetuating 12 mpg cars as an example).

It is likely that to make up the new $1,000 tax, it would be a combination of all of the above. In any case, the corporation doesn't pay, people do.

Beware of politicians telling us that they will tax corporations to solve budget shortfalls. It is just another way of getting we the people to pay the tab.

Henry Royer

Cedar Rapids