One of the most important parts of taxation is being able to tell how much you are paying and what is it being spend on. The best example of this transparency in taxation is the itemized property tax bill you get in the mail once a year. You get a break down of how much you’re paying, what the money is going towards, and how it compares to last year. This creates a connection between what you pay and what you get. Gasoline excise taxes, which are clearly posted on pumps, create the same effect. Sales taxes get a little fuzzier since while portions of them are often earmarked for specific purposes, most of it goes into a slush fun. By the time you get to the “who knows where it goes” personal income tax, you have a level of taxation so opaque that we can’t quite figure out what the money is spent on, but at least we know how much we’re paying.
No so for corporate income taxes. As much as we’d love to believe the myth that cigar-chomping mustachioed men in smoke-filled rooms are having to dip into their Scrooge McDuck vault to pony up their tax bill, it just isn’t so. Businesses always build their costs into their products and services, and most of them aren’t really going to let on as to how much of their retail cost goes to specific purposes. Quick: how much of Ford’s taxes did you pay when you purchased that new pickup? You have no idea, and that’s the problem. It’s not just that you’re paying a hidden tax either. Companies spend as much (or, in the case of GE more than) finding ways to not pay taxes as they do in checks to Uncle Sam.
And this gets down to a very simple truth: companies do not pay taxes, people do. The consumers of the product are the ones shouldering it, but they don’t even get the benefit of knowing how much it is. Ending the corporate income tax doesn’t raise taxes on people, it just makes those previously unknown costs known while eliminating the loopholes that corporate collectivists are so fond of using. Doesn’t that sound like a refreshing idea?