Question:

Why do we tax businesses when the tax just slows production and is passed on to the consumer anyway?

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Income tax, payroll tax, and compliance costs are all built in to the price of the product.

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  1. A corporation is a legal entity separate from its owners.  As such it can own property and has it's own rights and responsibilities.  One of those responsibilities is the payment of income taxes on its profit, withholding payroll taxes on it's employees, and complying with the law.  


  2. Because politically, the further the sting of taxes is removed from the voter, the better.

  3. It redistributes wealth

  4. True, but the burden on most businesses as a function of unit price of output is considerably less than 10%.  With most businesses it's around 5% or less.

    How do you figure that taxes slow production?  That simply doesn't make any sense!

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