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Economics-D-H

13 Mar

The liberal politicians are always talking about taxing the rich corporations more. They imply that the rich aren’t paying their fair share of the taxes. While that sounds reasonable, it ignores reality. A corporation takes money in and spends it on raw materials, wages, and returns to stock holders, in addition to taxes. If taxes increase, it must get the money from somewhere. The only source of funds that it has is the income from what it sells, so it must pay the increased taxes by raising the price of what it sells. As a result, the corporation doesn’t really pay the increased taxes, it passes the cost on to consumers. As a result, the increased taxes actually fall on consumers. The rich can afford to tighten their belt a little and  reduce the luxuries they purchase, however, the working class and poor cannot. Those increased costs must come from cutting back on necessities like food and utilities. If those increased costs are too much, they may threaten the person’s ability to obtain food, utilities, and shelter. We are seeing this in California where excessive taxes and government spending have resulted in run-a-way inflation, which has resulted in the largest homeless population of any State and a large number of residents are leaving California to find somewhere else to live where taxes and the cost of necessities is lower. If our federal government continues to follow California’s example, it will spread the burden over the entire country and there won’t be anywhere else in the United States to go.

 

 

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