Jan 20 2009
The First Day of New Leadership - Let’s talk Economics 101
Corporations do not pay taxes, consumers do. It is a basic fact that corporations pass the costs associated with any taxation straight to their customers in the form of higher prices. Currently, the United States has a tremendously high corporate tax rate. But can our economy handle higher corporate tax rates?
If our new administrations raises corporate tax rates, like Obama wants to, corporations will then have to raise their prices even more. Either that, or move their companies to another country that does not tax them as severly. You think spending is down now?
Jobs cannot be created in a system with higher tax rates. If corporations are taxed more, profit margins are lower. If profit margins are lower, companies run to other borders, taking jobs with them, or they simply stop producing as much. Do I have the answer?
Absolutely not! Just do not raise corporate taxes too much or the effects may be worse than we can imagine.
