What is killing our economy

March 18, 2008

More Evidence That Corporate Tax Cuts Help Workers

by William Ahern


A new study from three prominent economists finds that employees suffer most when their corporate employers must pay high corporate taxes. That contradicts the theory that has prevailed for decades -- that corporate taxes mainly hurt investors -- but it supports a recent CBO study by Randolph that found workers bearing 70 percent of the burden of corporate income taxes.

The new study's authors are Fritz Foley and Mihir Desai of Harvard and James Hines of the Univ. of Michigan, and their study is titled "Labor and Capital Shares of the Corporate Tax Burden: International Evidence." They first presented it to the Brookings Institution in December, and yesterday, March 17, they presented it to the American Enterprise Institute.

They find that the workers' share of the corporate tax burden ranges from 45 to 75 percent. This provides more intellectual ammunition to the growing group of lawmakers who are arguing that the U.S. needs a lower corporate income tax rate, a group that includes Ways and Means Committee Chairman Charles Rangel (D) and Senator John McCain (R).

The Tax Foundation has recently compared U.S. corporate income tax rates, both federal and state, to the rates levied around the world, finding that U.S. taxes are either highest (federal only) or second highest (federal plus state).
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This is what is killing our economy. It sounds good when a politician talks about these evil corporations and the tons of money that they get. But who actually payes the taxes? The workers and the consumers!! The workers get cuts in pay and less benefits when corporations have to pay more money. And their taxes are also included in the price of everything that we buy! And people wonder why corporations want to relocate out of the U.S.? If they were given tax breaks they could hire more people have better benefits and higher wages. Yes they make high profits but do you know the difference between profits and profit margins? Did you know that the government makes more on a gallon of gas than the actual company selling it?

The fair tax would be an excellent way to boost our economy. The tax would be added to every product that we spend. Though the price of everything would stay the same because the embedded taxes that we were paying on products would be removed. It would encourage saving because we would only pay taxes when we wanted to. Richer people would still be paying a higher percentage because they would be buying more things. It would not hurt lower income families because the plan includes a check every month for living expenses. This is just a basic overview if you have any questions I will be happy to answer for you or find out the answer. Also look at the fair tax book, and the new fair tax answering the critiques. I have read the first one and have not yet read the second. It is small and an easy read.

I think it sad that most people do not realize how much they actually pay in taxes every year. You can ask people and they will say things like... oh I didn't pay I got money back! And they don't realize that there was a time when we did not have income tax. I think that the government misuses our money and we should create a way to take that money back because we know better what to do with our money than the government does!