Why I love the VAT (sales) tax and hate the corporate income tax
Okay, okay — that title is a bit of a “click bait” come-on. A more nuanced headline would be “When looking at the VAT/sales tax (hereinafter called simply the VAT tax) vs. the corporate income tax, OF THE TWO I far prefer the VAT tax.” Too wordy for a headline.
It’s all about truth in taxation. And the truth is that corporations don’t pay taxes. Their customers pay the “corporate” taxes.
CorporationsCOLLECT taxes from their customers in the form of higher prices. Corporate taxes are almost all “pass through” taxes that customers never even realize that they are paying. In contrast, customers DO see a VAT or sales tax when they make a purchase. More about that shortly.Most Corporations in competitive markets have limited options. To deal with the higher costs of increased taxes and mandates, businesses have do one or more of the following:
Charge customers for the taxes (it’s just another cost of doing business). Pay their employees less. Accelerate automation to lower labor … Read More