Taxing The Business Myth

Hey Jessocialists

When it comes to economic injustice, redistribution of wealth and sources of income for the government, everyone tends to rally around the idea of taxing the businesses. Those greedy businessmen are making a killing by selling products and services we need and want and buy of our own volition and free will, damn those pesky businesses.

Why are they so convenient? Why can't I, as a consumer, resist the urge to purchase? Anyway, that's a story for another day.

I find that many people think businesses are an endless glut of resources just waiting to be taxed so that money can be put to oh so good use by government programs. It's as if they are this untapped resource that government programs have not already milked dry and function outside the laws of economics.

The funny thing is when you call for taxes on businesses; you are actually calling for taxes on yourself. Businesses don't pay taxes; only people pay tax.

Ask yourself this question, can I tax the businesses assets? Can I tax the businesses name? Can I tax the businesses consumption? No, a business is just a name on a piece of paper and any tax added on it, is redistributed to those who work in it or support the business, the people pay the taxes.

When a company brings in an income through the sale of goods and services that cash is used for various improvements or incentive structures. The income can be used for operational costs, research and development to improve the product and lower costs by increasing production.

It could be used to compensate workers; it could be used to provide better working conditions, it could be used to pay shareholders a dividend, it could be used acquire or start new companies and add more productivity to the economy.

The shareholder's pay

When you place an additional tax on businesses, the income that goes to government reduces the amount or the ability to pay out dividends to a shareholder who backs the company. Many would think screw shareholders they are rich, but what we forget is that smaller shareholders or pension funds are holding those shares.

The tax hurts all shareholders equality and robs from them and continues to one of the reasons why pensions are so grossly underfunded these days.

The employee's pay

When you tax a business, they have smaller margins to play employees, they even have less incentive to higher employees, or they pay more tax. Each employee is an additional tax burden on the company so not only do those that are there get paid less but jobs that could have never been created come into existence because of the tax.

The customer's pay

Adding a tax to businesses means that their operating costs become more expensive, they need to pay the government their piece and where are they going to get it from? The consumer of course, so that tax is deferred to consumers to pay to make the cost of goods and services more expensive.

The society pay

The reduction in a businesses capacity to grow because of taxes reduces their odds of improving their services, making breakthroughs deflating the price of goods and services, providing a higher quality product and the creation of a more effective market place as well as adding new jobs to the economy.

When you tax a business, society pays in ways we do not yet seem to understand or realise.

Calling for your own punishment

If after reading this, you still feel that taxes on business are good enough to continue to call for it, then, by all means, that's your right. I only aim to highlight the various consequences of business tax and that it's not some untapped reservoir of capital but only an additional mechanism to get at your purchasing power.

Have your say

What do you good people of HIVE think?

So have at it my Jessies! If you don't have something to comment, comment "I am a Jessie."

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