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Friday, March 27, 2009

Reagan's Wisdom on Hiding Taxes

To get away with raising taxes in the hope no one notices, one common tactic is to tax individuals indirectly by taxing businesses. Well a business is nothing more than a group of people, and the reality is that every tax on such a group of people is ultimtely paid by workers in the form of lower wages, owners in the form of lower returns, or consumers in the form of higher prices. It's still a popular tactic because the true cost of the government is further obscured. Reagan put it this way:

The most dangerous myth is the demagoguery that business can be made to pay a larger share, thus relieving the individual. Politicians preaching this are either deliberately dishonest, or economically illiterate, and either one should scare us. Business doesn't pay taxes...Only people pay taxes, and people pay as consumers every tax that is assessed against a business...If the tax cannot be included in the price of the product, no one along that line can stay in business.


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