This article is a re-print of Richard Harshaw’s article in August 2011 for AIR CONDITIONING TODAY. Do you think he got it right?
The news has been abuzz lately with snippets of our elected political heroes bloviating about how “the other party” is endangering the country’s safety by their various positions and/or tactics on how to handle the nation’s debt ceiling before the August 2 bewitching hour. (By time you read this, this will have all been settled… perhaps.) One side wants to cut spending dramatically while the other wants to raise taxes in an equally dramatic way. One side says, “We cannot afford any more of this spending binge!” while the other says, “We won’t cut entitlements!” Both sides frankly need to step to the plate and “eat their peas” and stop creating diversions.
One of the more sinister ploys in this comical farce (except no one is laughing, especially if our elected political heroes fail in their mission) is to say that it is not right that owners of corporate jets and big oil companies should get tax breaks. (Tax breaks signed into law, by the way, as part of the last round of stimulus spending.) These tax breaks should all go away, the argument goes. This will bring billions into the federal coffers.
This line of reasoning believes that wise Americans will see the light and demand an end to all “corporate welfare”. Even Ben Stein, a fiscally conservative Republican, agrees with this. Ben said that he was in favor of soaking the rich, because that would generate some $900 billion in additional revenues. This in the face of a national debt of over $14 trillion (for a real scare, log onto www.usdebtclock.org).
What most Americans don’t understand is that NO CORPORATION PAYS INCOME TAXES! Suppose the Congress does take away the deduction for corporate jets, or the tax loopholes for big oil. Gee, do you think General Electric (or MetLife insurance company or Shell Oil) will eat that hit on the bottom line?
OF COURSE NOT. They’ll factor that into the price of the product and pass it on to their customers. In fact, any tax loophole currently allowed by the government will become a product price increase if it is rolled back.
Wouldn’t you do this if you suddenly found yourself holding an invoice from the IRS for, say, $30,000?
So each Party blaming the other or those mean big businesses only obfuscates the issue.
Then some day, the tax payers will wake up and wonder why gasoline went up 50 cents a gallon, or why their insurance deductible just rose by $1,000 or why their bread costs a quarter more per loaf.
In the final analysis, the words of Abraham Lincoln ring so true, perhaps more so in our day than even in his:
“Property is the fruit of labor…property is desirable…is a positive good in the world. That some should be rich shows that others may become rich, and hence is just encouragement to industry and enterprise. Let not him who is houseless pull down the house of another, but let him labor diligently and build one for himself, thus by example assuring that his own shall be safe from violence when built.” (March 21, 1864)
Or these words from James Madison, primary author of our Constitution:
“That is not a just government … where the property which a man has in his personal safety and personal liberty, is violated by arbitrary seizures of one class of citizens for the service of the rest.”
Ronald Reagan once said, “Since when do we in America believe that our society is made up of two diametrically opposed classes—one rich, one poor—both in a permanent state of conflict and neither able to get ahead except at the expense of the other?”
Remember, people. Corporations don’t pay taxes. The consumer ALWAYS pays ALL taxes.
Period. Do you understand?
