Kevin Price
Conservatives should stop class warfare rhetoric and expose liberal lie
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By Kevin Price
February 4, 2012

Conservatives are up in arms over the fact that only approximately one half of the population pays income taxes. I notice how this has become a mantra of Republicans. It is a mantra of alienation rather than of building support.

This is a well intended distortion of the truth. It is designed to make us angry over the fact that a huge number of Americans do not contribute to the government pie. But it is a distortion. Everyone pays income taxes, even if it is not their own. Instead, they should be angry over the way we get that revenue.

The income of businesses is generally taxed heavily (on average, the second highest in the industrialized world) and this is a fixed cost of doing business. Like rent, insurance, phone service and other necessary elements of a business, income taxes are a fixed cost of running companies. Like all these other items, businesses simply add the costs to the products or services we buy. Therefore, everyone pays income taxes, just not their own. Everyone pays for them in higher prices.

Because government taxes businesses, companies often weigh the benefits of staying in a certain country. If the taxes become too high, business simply pull up stakes and move somewhere else. This is not much different than changing the state one chooses to have a business in because of labor costs, or changing where one has an office to lower rent. As mentioned earlier, currently the US has the second highest tax rates of any industrialized country in the world. It is no surprise that many businesses are in the process of moving to other parts of the world.

So since businesses do not actually pay taxes and it leads to companies moving overseas if too expensive, why tax businesses at all? The reason is both simple and sinister. Cowardly politicians do not want to tax people directly, so they force businesses to do their dirty work by taxing them, who in turn tax us with lower quality and higher prices. Businesses don't vote, people do, so politicians tax the companies. Businesses don't pay taxes, people do, so the politicians force companies to do their dirty work.

So if the government cuts or eliminates taxes on corporations, would not businesses simply become richer? Maybe, but not from the tax cuts. What would actually happen if taxes on businesses were eliminated? In every industry across America there would be players that would lower prices in proportion to the cut in order to get a larger share of customers. This would rather quickly drive prices down across industries, making consumers richer and creating huge numbers of jobs. Walmart, for example, has the lowest cost per product of virtually any retail company in the world. There is no doubt in my mind that it would drop prices immediately and others would have no choice but to quickly follow. The vast majority of corporations make a net profit of 7 percent on average. This is how the market works — either competition or the threat of competition — forces companies to keep profits modest so their business can steadily grow. As the saying goes, "pigs get fat and hogs get slaughtered." This simple adage explains why the end of corporate taxes would lead to a proportional savings to consumers.

Eliminating taxes on business would make a more honest political system where voters would feel the cost of government expenditures. Politicians would face a higher level of accountability since they would be forced to take money from voters. Furthermore, the economy would experience a boom like we have not seen in years (if ever). We need honest government, eliminating taxes on businesses will be one of the many things we can do to pursue such.

The battle begins for those who support less government by abandoning the rhetoric of the left "we pay and they don't" and be honest about the situation. Every income group should demand truly transparent government. Every person pays taxes, should they not be aware of that? The only consistent argument that will work is to eliminate all taxes on businesses in order to keep our jobs in this country and to keep our tax system honest.

© Kevin Price

 

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Kevin Price

Kevin Price is Publisher and Editor in Chief of www.USDailyReview.com

His background is eclectic and includes years of experience in both business and public policy, as well as two decades of experience in broadcast journalism. He was an aide to U.S. Senator Gordon Humphrey (R-NH) and later went on to work in policy areas with some of the nation's leading think tanks including the National Center for Public Policy Research and was part of the Heritage Foundation's Annual Guide to Public Policy Experts... (more)

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