The Democrats’ Taxation Fraud

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One of President Obama’s campaign promises was not to raise taxes on middle-class Americans. So here’s my question: If there’s a corporate tax increase either in the form of “cap and trade” or income tax, does it turn out to be a middle-class tax increase? Most people would say no but let’s look at it.

There’s a whole subject area in economics known as tax incidence — namely, who bears the burden of a tax? The first thing that should be recognized is that the burden of a tax is not necessarily borne by the party upon whom it is levied. That is, for example, if a sales tax is levied on gasoline retailers, they don’t bear the full burden of the tax. Part of it is shifted to customers in the form of higher gasoline prices.

Suppose your local politician tells you, as a homeowner, “I’m not going to raise taxes on you! I’m going to raise taxes on your land.” You’d probably tell him that he’s an idiot because land does not pay taxes; only people pay taxes. That means a tax on your land is a tax on you. You say, “Williams, that’s pretty elementary, isn’t it?” Not quite.

What about the politician who tells us that he’s not going to raise taxes on the middle class; instead, he’s going to raise corporate income taxes as means to get rich corporations to pay their rightful share of government? If a tax is levied on a corporation, and if it is to survive, it will have one of three responses, or some combination thereof. One response is to raise the price of its product, so who bears the burden? Another response is to lower dividends; again, who bears the burden? Yet another response is to lay off workers. In each case, it is people, not some legal fiction called a corporation, who bear the burden of the tax.

Because corporations have these responses to the imposition of a tax, they are merely government tax collectors.

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  • bubba4

    By this logic, all taxes are middle class and poor taxes.

    We're talking about 3 percent and a return to modest capital gains tax…you know like it was before Bush declared the government had taken in too much of our money and he was giving us a refund. We got our refund..how did that work out for us? Millions upon millions of jobs lost…

    Historically we are talking about very small changes in %. The whining about class warfare and the smothering of "prosperity potential" is to hide the simple and boring facts of it all. People that have done very very well even in these hard times can pay 3% more. Since 2008 I am no longer sure that the crooks and liars and international conglomerates won't kill the beast on whose tit they suck. Without a middle class and a struggling but hopeful working-poor there is no one to buy the crap…there is no one to bus the tables, there is no one to polish the monocles.

    "In other words, we can never tell how much richer we would have been without today’s level of congressional interference in our lives and therefore don’t fight it as much as we should."

    This is beautiful. So it's not that we don't know how much WORSE off we'd be without TARP and the Stimulus bill…it's we don't know how much it's hindered us? Are you #^%*)$ kidding me Walter…this is insulting. Just rewrite history why don't ya.

    C U L T

    • donna_marie

      Spoken like someone from the leftside. "Modest capital gains" change. Actually right now we have a "modest capital gains tax". Why should we pay tax on using our own capital anyway? I put my money into a market fund and when I sell it, I have to pay a tax-not fair, I say. What happens when the government taxes it all-or just takes it for that matter (like our retirement accounts)? Would that make you happy?

    • jonc

      People that have done very very well even in these hard times can pay 3% more.

      How about if I decide you can pay 1 percent more?

      Or, how about if Steve's grandma decides you can pay 2 percent more.

      Or, how about if Bill's friend decides you can pay 5 percent more.

      Who the hell are you to decide anyone can or should pay anything more?

      • bubba4

        I think it's amazing how the meme hasn't changed one bit since this recession began. "we" the "government" just bailed out "the rich". They CAN (which was the important word there) pay 3% more because that's where taxes were when these tax cuts came into effect and what they were meant to return to. It's not going to hurt the poor dears.

        I would fine with letting all the tax cuts remain, lets just put a 50% tax on profit made from the war or contracts resulting from it….how about that?

        • jonc

          declaring the the 'meme hasn't chnaged' does not answer my question, nor does it justify your position.

          Furthermore, I never argued that the rich were not bailed out.

          I find it amazing that people like you have no problem categorizing 'rich' civilians as greedy theives who cannot be trusted with their own money, yet you somehow believe that politicans will act with integrity once they've taxed everyone for what they are worth.

          Pray tell, how does this logic jive with reality?

          • bubba4

            "declaring the the 'meme hasn't chnaged' does not answer my question, nor does it justify your position."

            Yeah but it expresses my heavy sigh upon reading you post.

            The article and this thread is about "the rich" ($250,000.00/year +) It's not about Steve's grandma and Bill's friend. You seem to be getting upset, like who the hell am I to ask for some old ladies money? So, if we could get back on track here…

            "Furthermore, I never argued that the rich were not bailed out."

            Well then let's all adjust our minds accordingly and stop trying to make it about friends and grandmas.

            It's just we have these little boxes to type into…I have to use shorthand…it's not suppose to cripple the conversation. When I put "" around a word like rich…I am acknowledging that is "so called" I am not trying to create an anticoncept. "Rich" as used in the article.

            This last bit is a strawman…can we avoid one extreme or the other? I'm not saying tax them at 90% and screw em…workers unite!

            I'm saying, quite pragmatically that the government needs that money and they CAN afford it…I can't. I don't make a quarter of a million a year. The government saved "the system"…the system that is making them a lot of money…some of it directly from bailouts.

            We are so far from this dystopian hell where everyone is taxed for what they are worth. You can't raise that specter everytime taxes are going to go up a couple of %.

    • sflbib

      "We got our refund..how did that work out for us? Millions upon millions of jobs lost… "

      By this logic, the government shouldn't let workers keep ANY of their money so that NO jobs are lost.

      • bubba4

        Look man, the talking head and pudits keep arguing that tax cuts create jobs…that if the rich get their "tax cut" then they will invest.

        BUT THEY GOT THEIR CUT…Bush gave it to them and we spiralled into recession…so obviously it isn't a magic job creator…that is just a narrative…and a false one.

        So lets all avoid the strawman arguments.

  • 1stcuts

    We'll said Dr. Williams. For forty years now, I have been telling anyone who would
    listen, that I have not paid a single tax or any other compelled tribute.

    For the first five years of my new business, until my accountant flipped the light on
    for me. I did not treat taxes as every other cost of doing business, and struggled
    as a result. Since then, I have collected millions from my clients and passed it along
    to the looters.
    Thanks again for your insights.
    1stcuts

  • MKS

    A very reasonable tax burden is needed for defense and security.

    Other than that, we would have no deficit if the government were not involved in hundreds of programs and activities for which it has no Constitutional mandate.

    • sflbib

      Hey, waitaminnit! Wait just one cotton-pickin' minnit. Do you mean you want to eliminate federal funding for sandals for gay ex-nuns with a foot fetish?

  • http://howcanpeoplebesostupid.com Edward

    Walter Williams nails it, again. When will the libiots realize that corporations do not pay taxes, people pay taxes, as he points out. I like the analogy to taxing land. I think a better suggestion that might drive the point home to many people, in a better way, would be to suppose a politician decided to tax dogs. More people own dogs than own property, so it might sink in a little better. This mentality (or lack thereof) that believes that taxing corporations is fine is the same mentality that cannot grasp the concept that when you raise taxes, tax receipts go down! History and Economics 101 are all you need to look at to realize that is also true.

    • bubba4

      Corporations are now "persons" according to the Robert's Court.

      • flicka47

        Sigh….__Corporations have always been "persons". That is why they are formed, to make a legal, taxable entity. Otherwise they could not attract shareholders, as those shareholders would be on the hook for ALL of the taxes owed by a corporation, personally legally responsible forALL the corporations debts,and personally responsible for any and all law suit consequenses.__ You surely would not want to invest 5% of a corporation's operating capital, have almost no say in how that corporation is run,and be legally responsible for all the debts.__Come back when you know what you are talking about…

        • bubba4

          No they haven't. They have been corporations. I am a person. I formed a corporation. You form corporations for the reasons you stated.

          We have different words for these things because they are suppose to mean different things. The Supreme Court didn't rule that corporations are entities (which would be redundant since corporations are formed with the sanction and blessing of government ) but persons capable of political expression to the tune of whatever millions they want to put towards something.

          The people running and working for these corporations already have this right as "people". So the ruling was just about geting around limitations of corporate donors directly for or against individual candidates.

          Thanks for the condescending lesson on "corporations" though…

          • flicka47

            So, with your logic neither corporations, unions, PACs or even political parties should be able to express their opinions? After all, they are not "persons" either…______Sauce for the goose, and all that…

  • hijinx60

    A good slow studious reading of the Constitution, especially Article one, would help us to see the Founders intent, purpose, and limitations on taxation. It would also show how unconstitutional the IRS is.