Wednesday, April 09, 2008

Stick it to the corporations!!

Let me offer an easy wager -- $20 says that you can survey 10 people on the street and not be able to find that even 2 of them agree with me when I say --

Businesses don’t pay income taxes – the “ C.E.O.” pays these taxes –

No, not the Chief Executive Officer but instead the “Consumers” C (via higher prices), “Employees” E (via layoffs and salary freezes/cuts), and “Owners” O (shareholders via lower stock prices and unpaid/reduced dividends).

Here is a Minnesota-specific example to show you just how painful corporate income taxes are to the average working person. Let's say "Mary Svenjohnson" works at Target Corporation's Minneapolis, Minnesota headquarters office. Then let's say our legislature overrides Governor Tim Pawlenty's veto (since I am certain he would veto such bad policy) to raise Minnesota's corporate income tax from its current 9.8% up to a full 11% as a way to "create jobs in Minnesota through government investments............."

Hey, come on Todd that is only a 1.2% increase -- surely a greedy company like Target can afford to pay it right? Wrong -- in order to pay the state coffers the additional 1.2% they have to choose how to raise the cash. One option would be to raise the prices on the clothing Mary Svenjohnson likes to buy at Target or even bump up their grocery prices. Another option - perhaps in combination with the first option would be to simply lay off Mary Svenjohnson to help reduce corporate overhead, and then once Mary is sitting at home unemployed she will have plenty of free time to read her mail from Target's Investor Relations department telling her that Target will cut their dividend payment to shareholders this year so Mary's 401k account takes a hit when this third option is pursued by Target to raise the funds the mandarins in state government demand for their central planning.

Yes indeed -- just keep raising corporate income tax so we get to the workers' paradise even sooner.


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