Relay-Version: version B 2.10 5/3/83; site utzoo.UUCP
Path: utzoo!mnetor!seismo!lll-crg!lll-lcc!qantel!ihnp4!drutx!brianb
From: brianb@drutx.UUCP (Brian Bell)
Newsgroups: talk.politics.misc,net.taxes
Subject: Companies *do* pay taxes
Message-ID: <1354@drutx.UUCP>
Date: Fri, 19-Sep-86 10:27:49 EDT
Article-I.D.: drutx.1354
Posted: Fri Sep 19 10:27:49 1986
Date-Received: Sat, 20-Sep-86 23:48:11 EDT
Organization: AT&T Technologies, Denver CO
Lines: 35
Xref: mnetor talk.politics.misc:204 net.taxes:579


>   Of course, this ignores the reality that corporate entities (businesses,
>really) ****DON'T PAY TAXES****.  Face it, it's true.  The cost of taxes paid
>by any properly managed business are passed on to the clients or customers of
>that business, through higher prices.  Thus, taxes may be paid *THROUGH* a
>business, but seldom, if ever, are taxes paid *BY* a business.

This is simply not true.

A customer making a choice between equivalent products made by
competing companies will choose the least expensive one (at least
according to the "rational person" premise of economic theory).
If Company A raises its prices to pay a 50% tax rate and Company B
keeps its prices low and pays a 10% tax rate, Company A won't survive
very long.  The customer doesn't care how much tax each pays, it only
wants the least expensive product.

For long-term survival of both companies, they must have basically
equivalent prices for equivalent products.  Assuming that each has
basically the same cost of production and sales, Company B will show
a greater after-tax profit than Company A, because _Company A is paying
more tax_.

The price that a customer will pay in a competitive market has nothing
to do with the costs (that includes taxes) that the supplier 
incurrs.  The price is set by the marketplace itself.

By the way, one of the reasons U.S. companies are having a hard time
competing with the Far East is because of tax structures there that
encourage investment in industry.  In other words, Far East _companies_
are not paying as much tax as U.S. _companies_.

Companies do pay taxes.

				Brian Bell