Who Pays Corporate Taxes? Look in the Mirror

Costs are passed on to consumers. If you work for and invest in companies, you get hit three times

By Phil Gramm and Mike Solon. Excerpts:

"the 2017 tax cuts and the Trump administration’s regulatory relief sent real median household income soaring by $5,220 in 2019. That’s 49% higher than the previous highest annual gain in 2015 and 11 times the average percentage gain over the previous 50 years. Real median income rose more in inflation-adjusted dollars in 2019 alone than during the entire Obama recovery from 2009-16. The poverty level plunged at the fastest rate since 1966, to the lowest level since the Census Bureau started collecting the data in 1959.

The lowest income quintile saw its average real income rise by 9.4% in 2019, the year after the tax cut took effect. The second quintile (7.4%), middle quintile (6.9%) and fourth quintile (7.8%) all experienced the largest annual income growth in more than a half-century, and the top quintile (7.2%) had its second-highest income growth. The poverty rate in 2019 was the lowest ever recorded for every category, including individuals, families, unmarried women, blacks, Hispanics and children.  

Since the Census Bureau doesn’t count refundable tax credits as income for the recipients or count the effect of any other tax change in measuring household income, none of these income gains and poverty reductions had anything to do with the increased child tax credit."

"Who owns American corporations? According to Tax Notes, 72% of the value of all domestically held stocks is owned by pension plans, 401(k)s, individual retirement accounts and charitable organizations, or held by life insurance companies to fund annuities and death benefits."

"Most economic studies conclude that 50% to 70% of a corporate tax increase not passed on in higher prices is borne by workers, while 30% to 50% is borne by investors."

"If you consume, you pay the corporate tax. If you consume and work for a corporation, you pay the corporate tax twice. If you consume, work and invest your retirement funds in corporate equities, the corporate tax rate hits you three times."

"a recent Treasury study confirms that 92.6 million families, 49.5% of all American families, pay more in corporate taxes than they do in individual income taxes."

"Mr. Biden and congressional Democrats claim corporations that get tax subsidies don’t pay their fair share, but the entire Biden program is festooned with special-interest corporate subsidies."