A regular reader sent this in the other day:
Politicians WILL NEVER understand that Corporations do not pay taxes no matter how high or low the rate.
PEOPLE pay taxes.
The COST of a manufacturer’s product INCLUDES the taxes they pay, besides the raw materials, and labor.
Do you want a lower cost of living? Educate your Congressman about true economics.
I personally think it is a hopeless cause.
The problem is that most industries have to compete. China offered five year corporate tax holidays to get companies moving offshore. Even when those companies started paying taxes it was less than the taxes they would have paid in the US. To compete companies in the US would need to cut profits, plus large retailers like Wal-Mart demand such low prices US manufacturers got cut out in f major distribution channels. In a global economy high corporate taxes kill jobs. That means less upward mobility and a requirement for the folks who do have jobs to pay more in taxes to help support those who aren’t making a living wage. The fight for $15 is the result of tax policies that killed jobs that had the ability to train an unskilled worker into a skilled worker whose wages grew as skills were added.
But surely everyone should realize that going from 35 to 20% will allow them the corporations to make their products cheaper and they, in turn, will sell the products to us at a cheaper rate! (NOT) 🙂
The reality is companies that have offshored their products in China and Vietnam are still charging prices reflective of US cost structures and paying less in taxes if they structured their business to take advantage of our tax loopholes. If a change in tax policy brings jobs back, I don’t expect to see cost reductions, but having those jobs would reduce services to the underemployed that are costing taxpayers money. If you want to complain about something go shopping, look at a jacket that costs $200 and read the made in Vietnam label realizing that the workers that made that jacket made less than $2 an hour and the company paid less in corporate and local taxes, yet none of that cost savings was passed to you. The new bill would close loopholes giving companies foreign tax breaks. When logistics costs are considered that makes it cheaper to move a lot of stuff back here. More employment lowers entitlement payments and ultimately can increase corporate investment in communities.