Warren and Sanders are picking a big fight with Amazon.com over its supposed low level of income tax payments to their government. The two senators are fighting, along with the majority of their Leftist colleagues, to raise the tax rate on big companies, so they will “pay their fair share” into government coffers.
However, basic economics states that Corporations Do Not Pay Taxes.
Their Customers and Employees Do. Taxes are an Expense to any corporation, but instead of “paying their fair share”, all corporations pass along that tax expense to their Employees (in reduced wages) and their Customers (in higher prices for goods and services). The Senators seem to have lost sight of that basic law of economics, just so they can tweet about how they are fighting for the little guy by making those evil corporations pay.
Also, remember that “Fight for $15” that wants to increase the minimum wage to $15 per hour? That’s just another expense for any company, and it usually results in higher prices for customers, and lost jobs when a business cannot pass the higher cost on to its customers. How would you like to buy a $10 Big Mac? Or a $3.00 Hershey bar? That’s what you can expect with a high minimum wage.
So maybe Warren and Sanders need to get Thomas Sowell’s excellent book, Basic Economics, and read up on how corporations pay taxes.
5 thoughts on “A quick note to Elizabeth Warren and Bernie Sanders (who seem to be ignorant of basic economics)”
Sanders’ ignorance is legendary. His first “real” job was as Mayor of Burlington. He was in his late thirties.
Warren, though … that’s the real head-scratcher. How much money did unsuspecting parents ladle out so their children could be instructed by someone so stupid?
I think there is no actual limiting principle for what is represented by fair share in tax payment by corporations, none that the liberal politicians will admit anyway. Increases in rates by the law of supply and demand reduce demand until fewer customers are served and net revenues decrease or the jobs are shipped to China. No corporation can ever legitimately take credit for paying a fair share in the eyes of liberals even if their profits were reduced to zero. Because of envy.
Leftists do not care about the laws of economics. For them, the tax code is not a way to raise government revenue, but a way to punish their enemies and reward their friends. They will have an interesting time when their big campaign donors start to squeal at the higher taxes coming their way. The big Wall Street banks are huge supporters, but will be the targets of increased regulation.
The most dangerous consequence of raising corporate taxes is occurring now in the middle of a pandemic- what timing! I speak of everybody’s favorite industry- Big Pharma- but do not forget we are the only country left on the planet that can afford the R&D and the 10-12 years of testing the FDA currently requires. (BTW, pre-Trump, Pfizer HQ was moving to Dublin and NYC was losing several thousand six figure jobs.)
Goodie for Canada who waits for the U.S. to incur all the expense and then when the patent runs out, that country appears heroic for providing “cheap” (aka generics).
I have another word for that- parasitic.