From Investor’s Business Daily:

The corporate tax study by R Street Executive Director Andrew Moylan, “Corporate Income Tax: More Trouble Than It’s Worth,” concedes upfront that the corporate tax enjoys “strong populist appeal.” Politically, that makes it very tough to cut.

But that public support comes only because Americans don’t understand the corporate tax’s dirty little secret: Companies don’t pay the tax, average Americans do. They do so through lower wages, lower returns on their retirement savings, and higher prices for goods and services. They think they’re sticking it to the man, but they’re really sticking it to themselves.

Moylan notes, “some studies suggest that as much as three-fourths of direct corporate income-tax costs are borne by a firm’s workers.”

He cites one study that finds for each percentage point increase in taxes, annual gross wages for workers declines 1.23%. For a household at the median income, that would mean a decline of $660 in wages. For someone just scraping by, that’s a good chunk of money.


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