Think about it. The business collected the money and passed it on to the government but the origin of the money was people. The same is true of any tax on businesses. Businesses do not pay nor have they ever paid taxes. Only people pay taxes!
The situation may actually be worse than it seems. What may be the unintended consequences if the prices of goods and services were increased to “come up with the money” to pay the tax bill? XYZ Inc. has competitors all over the world. The competitors didn’t experience the 10 percent tax increase. Now the cost of XYZ’s goods are higher than its foreign competitors; the worldwide demand for its goods shrinks, its share of the market drops and employees begin to be laid off.
The upper management of XYZ Inc. begins talk of moving its operation to another country where the business tax climate is more favorable. Does any of this sound familiar?
Economic studies have found that the consequences of the federal tax code add an average of 22 percent to the retail prices of all American produced goods and services.
From page 106 of “The FairTax Book” by Neal Boortz and John Linder, “Economists estimate that in the first year after the Fair Tax Act becomes law, the economy will grow by 10.5 percent. Exports will grow by 26 percent and capital spending will increase by more than 70 percent. Has there ever been a day in your lifetime when the American economy was this robust?
Please call, email and/or write your representative and senators: request that they support American businesses and all Americans by supporting the progressive Fair Tax system.
Glen Terrell is an Arlington resident and proponent of the Fair Tax. Contact him at email@example.com.