Fictitious names used in
this illustration.
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ZACME MOLDING
CO.
makes rubber
grommets
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Corporate taxes levied by
state and federal on Zacme Molding.
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Zacme Molding sells
grommets to Shiny Parts, and the price of the
grommets includes the cost of taxes levied on
Zacme. So Shiny pays the tax for Zacme.
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SHINY PARTS
CO.
makes metal
computer box
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Corporate taxes levied by
state and federal on Shiny Parts.
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Shiny Parts sells metal
boxes with grommets in them to Bigtek Computers,
and the price of the metal box includes the cost of
taxes levied on Zacme and Shiny. So Bigtek pays the
taxes.
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BIGTEK COMPUTER
CO.
makes computer
assemblies
|
Corporate taxes levied by
state and federal on Bigtek.
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Bigtek Computers sells
computer assemblies to Fast Engines, and the price
of computer assemblies includes cost of taxes
levied on Zacme and Shiny and Bigtek. So Fast
Engines pays the taxes.
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FAST ENGINE
CO.
builds automobile
motors
|
Corporate taxes levied by
state and federal on Fast Engines.
|
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Fast Engines sells motors
to Awesome Cars, and the price of the motors
includes cost of taxes levied on Zacme and Shiny
and Bigtek and Fast Engines. So Awesome pays the
taxes.
|
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AWESOME CAR
CO.
builds family
sedans
|
Corporate taxes levied by
state and federal on Awesome Cars.
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Finally.......
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When you buy a car, the
price includes the cost of corporate taxes levied
on all the manufactures of all the parts in the
car.
YOU
PAY! And it's about 23% of the total cost!
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- Every part in any product
you buy, services too, experiences a similar tax burden trail.
- You pay the taxes levied on
every company that makes a part in any product you
buy.
- No matter where you look, ALL
taxes are paid ONLY by the the common citizen.
- Your income taxes may be small
compared to the taxes you pay when you buy stuff, and those taxes are hidden.
- And if you buy a lot of
stuff... well, you get the picture.
- Now it's your turn: you pick
any product, and see if you can trace the tax burden, and
figure out who pays.
- And don't forget the cost of collecting and processing all this tax action. That's also included in the price of products.
The point is, when a tax is levied against a corporation, that corporation just includes the cost of that tax (and the cost of complying with the tax laws) in the price of its product or service. So the customer pays the tax. This applies at any level, and flows all the way to the private citizen who ultimately pays all the taxes. Sometimes it's a long chain, but all the links are connected, and at the bottom of any product tax chain, is the private citizen. So, corporations collect taxes for the government, they don't pay taxes. It's just another way the government gets your money! The embedded cost ranges from 22% to 30%, depending on the product.
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