The new IRS statistics are out and the commentary starts. This will provoke the usual arguments about who pays a fair share, income inequality, and so on. But these kind of numbers don’t get at the heart of the problem.
Suppose you buy some toothpaste at Target. Target makes some profit and they pay taxes on the profit. The tax is built into the price. In reality, you paid the tax. But Target didn’t make the toothpaste - they bought it from P&G, which made a profit that was taxed. The tax was built into the price that Target paid and built into the price you paid. You paid the tax. But P&G didn’t make the toothpaste tube - they bought it from someone who made a profit, paid a tax, and built it into the price. Again, you paid the tax. And on and on it goes.
And it doesn’t stop with the taxes on corporate profits. Corporations pay lots of taxes: property taxes, Social Security taxes, unemployment insurance. All of those taxes are built into the price you pay for products. And, just to make it perfect, whatever profits the corporations distribute to shareholders are also taxed.
You may not like the income tax, FICA, property taxes, sales taxes, and excise taxes, but they’re only part of your tax burden. The “hidden taxes”, built into the price of everything you buy, is huge and invisible.
When politicians talk about taxing the oil companies, the airlines, the phone companies, or just about any other business, remember who really pays. Think you’re getting your money’s worth?
