Monday, March 7, 2011

Corporate Taxes

Yesterday, I had a discussion with my sister about corporate taxes. She felt that corporations were grossly over taxed. They provide jobs, so we need to give break on their taxes.

My point was that frequently corporations when they are looking into a location ask two things: 1) they be given certain incentives on taxes in the location; 2) the local government provide them with certain infrastructure improvements. However, if the corporations have the tax breaks, who pays for those special things they need. The answer is simple: People. So the very people that the corporate entity is employing are paying the taxes for these things. Does corporation pay their employees more to makeup the added expense they are incurring? Probably not. So the governing authority must either raise their taxes on people or cut something. In the present time they need to cut something, so something else is going to be cut: schools, streets, parks, etc.

Now this brings up another issue in this arena: Corporation want to have the same rights as people in political contributions. They want to get the people they support elected to office, but they do not pay the taxes that come with the free speech.

I guess my point is that, if corporation need something from society, they should be will to help pay for these things; they are legitimate expenses they should be paying. When people are subsidizing corporations, they are only artificially padding the corporations profits. It sounds like corporate welfare to me.

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