Didn't you get the memo? Corporations don't pay taxes.

Are you kidding or are you serious?

I'm concerned about what will happen when someone finally makes legislation to put the tax hammer down (or regulate prices) on pharmaceutical companies.

I imagine they'll go to Mexico or something like that.

So? It might be worth it; people are getting cheap drugs from Mexico as it is. And if they want American consumers, they'll *still* have to get FDA approval for any drug, but it will take longer to get them into the hands of consumers...which might be a good thing.

That's a lot of jobs...People are always the most expensive thing in an organization, especially professionals, like chemists and molecular biologists.

Not to mention millions of dollars in grants given out to research every year.

Any savings on drugs costs to the consumer would be inconsequential compared to the migration of an entire industry.

As a Canadian, I always hear Americans talking about how corporate-friendly the U.S. is. How can this be the case if they have the second highest corporate tax rate? What happened to George Bush giving things to the upper class?

Someone had to kick off the conversation. :p

Was just getting that out of the way. :D

Technically, though, no business actually pays taxes. Their customers do. When you figure what you must charge to make a working profit, you must add taxes to the expense side of the equation and so pass that cost to the customer.

First of all, it's a lie.

What you'll hear is "George Bush/Republicans doesn't/don' care about the middle class. He/They give tax cuts to the RICH."

In reality, Bush and the Republicans do care about the middle class. He/they gave tax cuts to the middle class as well. The rich got more money back. However, if you look at percentages, they got no more money back than did the middle or lower classes.

Here's another example of what I was trying to explain:

"It's just a tax cut for the rich!"

But what does that really mean?

Let's put tax cuts in terms everyone can understand.

Suppose that every day, ten men go out for dinner and the bill for all ten comes to $100.


If they paid their bill the way we pay our taxes, it would go something like this:

* The first four men (the poorest) would pay nothing.
* The fifth would pay $1.
* The sixth would pay $3.
* The seventh would pay $7.
* The eighth would pay $12.
* The ninth would pay $18.
* The tenth man (the richest) would pay $59.

So, that's what they decided to do.

The ten men ate dinner in the restaurant every day and seemed quite happy with the arrangement, until on day, the owner threw them a curve.

"Since you are all such good customers," he said, "I'm going to reduce the cost of your daily meal by $20."Dinner for the ten now cost just $80.

The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still eat for free. But what about the other six men - the paying customers? How could they divide the $20 windfall so that everyone would get his 'fair share?'

They realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to eat their meal.

So, the restaurant owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay.

And so:

* The fifth man, like the first four, now paid nothing (100% savings).
* The sixth now paid $2 instead of $3 (33%savings).
* The seventh now pay $5 instead of $7 (28%savings).
* The eighth now paid $9 instead of $12 (25% savings).
* The ninth now paid $14 instead of $18 (22% savings).
* The tenth now paid $49 instead of $59 (16% savings).

Each of the six was better off than before. And the first four continued to eat for free. But once outside the restaurant, the men began to compare their savings.

"I only got a dollar out of the $20,"declared the sixth man. He pointed to the tenth man," but he got $10!"

"Yeah, that's right," exclaimed the fifth man. "I only saved a dollar, too. It's unfair that he got ten times more than me!"

"That's true!!" shouted the seventh man. "Why should he get $10 back when I got only two? The wealthy get all the breaks!"

"Wait a minute," yelled the first four men in unison. "We didn't get anything at all. The system exploits the poor!"

The nine men surrounded the tenth and beat him up.

The next night the tenth man didn't show up for dinner, so the nine sat down and ate without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill!

And that, boys and girls, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start eating somewhere else where the atmosphere is somewhat friendlier.

David R. Kamerschen, PhD
Professor of Economics
University of Georgia

They do have their corporate income tax, their property taxes, and many other taxes.

Yes, in the end, it is the consumer that is paying their taxes. But that's the same as any other person that has a job.

Truth or Fiction?

Fiction.

Just because no one knows who wrote it doesn't make the point less valid.

Eh. I don't care who it's written by. I just thought credit was deserved in case he really did write it.

That is why I support a consumption tax. It's more honest, plus you get a way to relieve the poor of the hidden tax burdens they now pay.