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CONLEY COMMENTARY (WSAU) – The latest bad idea from the Harris campaign: raise corporate taxes to 28-percent. That would un-do the tax cuts enacted when Donald Trump was president.
I’ll let you in on a secret: Corporations don’t pay taxes; never have, never will.
You pay the corporate tax. It’s part of the price you pay for the goods and services that they produce.
If I own a Jelly Bean factory, imaging a make a profit of 25-cents on each bag I sell. Taxed at 28%, that goes down to 18-cents per bag. My profit margin, already small, could be eaten away further as the sugar that arrives at a port in California has to be transported by more expensive electric trucks. It assumes bad weather won’t disrupt my raw materials. It assumes that diesel costs from my factory to the store won’t spike. And, yes, the people who invest in my jelly bean operation expect a dividend – which, by the way, is also taxed. And if I can’t create a profit for my investors, they’ll direct their money somewhere else. So… of course… I have to pass on the cost of taxes to the consumer.
Here’s another secret you don’t know: Burger King is owned by a much smaller corporation – Tim Horton’s of Canada. Actually, Burger King bought Tim Hortons and moved the corporate headquarters to Toronto. Why? Because Canada has lower corporate taxes than we do. Why are many pharmaceutical companies headquartered in Ireland? Because Ireland has more favorable laws for writing off the costs of research. Budweiser, Good Humor Ice Cream, and Purina Pet Food are all headquartered overseas… for tax purposes.
And remember, high corporate taxes smother ingenuity. If I have an idea for a new product, I take all of the risk. If my idea isn’t popular, I lose everything. Only if my idea is a success – then my silent partner, Kamala Harris’ federal government – shows up and claims 28-percent of the fruits of my labor. How many ideas don’t come to fruition because would-be entrepreneurs aren’t interested in that deal?
And, of course, Kamala will also complain that inflation is caused by my greedy profit motive, not by her hairbrained tax policy.
Chris Conley
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