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To: eastsider

"corporate" taxes are paid by the people who buy the goods from that corporation. The corporation does not pay anything, it merely passes on the costs.

Stupid people think this is 'mean' but they dont realize the company has to make a profit on what they sell or they go out of business, so they have to add the taxes into the 'cost' or producing an item.

But for the REALLY stupid... lets say a company agreed to have NO profit- they would still have to charge enough for the product to pay their employees and raw materials AND TAXES. See how that cost goes into the price of the product?


475 posted on 01/31/2005 10:59:07 AM PST by Mr. K
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To: Mr. K
I'm all for profit! : )

My question was borne of my initial skepticism that a consumption tax for consumers only could make up for lack of corporate tax. After looking over the fairtax.org site, I now see that it's possible.

Getting back to the actual flow, I take it that a manufacturing corporation would not pay tax on items it purchases to produce a product; otherwise, the cost of the ultimate product, before mark-up is considered, would be exponentially higher because of the successive generations of tax-paid being forwarded to the end-user. So by a corporation's not paying taxes on parts purchased, the cost of the end product (before profit is added) is theoretically cheaper.

Do I have this right?

495 posted on 01/31/2005 11:16:19 AM PST by eastsider
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