-By Frank Hyland
Effective the 1st of April, your nation achieved Number One status, but in a category that won’t make you pleased or proud: The U.S. now has the highest corporate income tax rate in the entire world as of that date. You’ve been hearing in the news recently a number of different views on this development. As I’ve watched the news, though, I first became more and more curious and then angrier and angrier. I may have missed it, but nowhere in the media, across the full political spectrum of Left to Right, have I heard or seen an explanation of the tax. The government has steered clear of an explanation. Some of them may believe that everyone already knows the details. Others, I really believe, hope that you don’t know the truth and never figure it out.
The key question, neither asked nor answered that I know of, is, “Who pays the corporate income tax?” Under U.S. law, a corporation is a “person.” Corporations realize income, have expenses, and pay taxes just as individual people do. But wait a second — although GE, Exxon-Mobil, Apple, and Safeway food stores take in the income and have expenses — who actually pays the taxes? Do you think the corporations do? While some, including the administration, probably hope you think that Exxon-Mobil pays the tax every time you fill up at the gas pump, give it just a moment’s thought and pardon my methodical approach – The gas pump, itself, doesn’t pay taxes; the gas station owner pays individual income taxes just like you do; the Exxon-Mobil Corporation forwards money to the Internal Revenue Service (IRS) as corporate income taxes. Where do they get those funds? They get them from you and from me, to put it simply. On many gas pumps nowadays, you’ll see a listing of the portions that make up the per-gallon price of gasoline. That listing came about in response to complaints about the amount of money in each gallon that goes to which recipient, including counties, states, and the federal government. That information is useful to you, too, but it’s a different issue. Nowhere on the pump does it tell you who actually pays the corporate income tax; nor does it tell you that you, in fact, pay them.
If I pulled into a gas station and the owner told me that my cost would be lower because I wouldn’t be charged the amount of money in each gallon that now goes to corporate income taxes and that my bill would be spread evenly among all other customers, I have to confess that it would test my sense of honesty to the utmost. Take away the taxes, and a gallon of gasoline would be waaaaaaaaaaaaayyyy down there on our list of expenses. But that’s what the vilified oil companies (and all other U.S. corporations) now do – spread the cost among all their customers. In effect, then, you and I are paying twice for the gasoline, once at the pump and again when Exxon-Mobil forwards a portion of its revenue (that you and I paid) to the IRS. Then on top of that, you and I send in our personal income taxes to the IRS. You can bet that Exxon-Mobil and other corporations would love to reduce their prices and have folks coming in more often than now, but have to forward that corporate tax to the IRS.
So when the President stands before an audience and rails against taxpayer “subsidies” to oil companies do you think he means what he says? If so, given what I’ve just told you, how big a dunce does that make him? Worse still, when you look at the audience behind him cheering him on, what does that make them? Go easy on them, please. Yes, it’s true that they’re even bigger dunces than the President, but they’re just Americans who’ve been lied to. Remember, the corporate tax rate increased on April Fool’s Day and so will our price at the pump; very, very appropriate, don’t you think?
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Frank Hyland is a long-time Writer/Editor who has written for The New Media Alliance, and also for The Reality Check and has appeared weekly on Life, Liberty & the Pursuit of Conservatism on Sunday evenings on Blog Talk Radio, along with Babe Huggett and Warner Todd Huston.