Thursday, March 31, 2005

The Fallacy of a Tax on Business

I heard on the radio today some liberal caller talking about how business should pay their fair share of taxes. On the surface, this seems like a great idea. All these business are making money, why shouldn’t they pay their fair share? The answer is simple. Business cover their costs by including them in the price of their products, thereby passing them on to consumers. What is a tax if not a government-imposed cost on business? Now, why won’t that cost be handled in the same manner every other cost is?

As one can see, there is no such thing as a tax on business, since the cost will invariably be passed on to consumers. Instead, every business tax in the US, indeed in the world, is simply a hidden tax on consumers. Therein lies the beauty of the business tax. We, as consumers, are blissfully unaware of it. While there’s no such thing as a free lunch, the government can get close by convincing us that business is paying the tax. Just something to remember the next time someone talks about businesses paying their fair share.

TOPIC: Politics