I have run three businesses, I know what cost structures of small and medium businesses are like, you can't make me believe that there is 22% hidden cost, it isn't there.
I think you mean well, but I am not talking about tax overhead expenses.
I am for they are the majority of the real costs the affect whether or not a business can even compete and exist even to hope to have a profit on which to pay income taxes in the first place.
Most small businesses don't have much of these types of expenses, they are really just a huge annoyance and make us spend a day per quarter and a weekend in Feb doing tax forms. This is an infintesimal percentage of most small business and medium business costs.
Sorry to say but most small businesses actually pay less taxes than they have tax related costs. Mainly because their reported taxable income is so small in realation to the tax related overhead costs they incur.
I have run three businesses, I know what cost structures of small and medium businesses are like, you can't make me believe that there is 22% hidden cost, it isn't there.
Fine I have experience with many small businesses and I know for a fact that most of them lose and expend much more in tax related costs, legal fees, penalties and fines, as well a account specifically required because of income taxes than the taxes they actually remit to the federal government.
From knowing the tax related overhead and productivity losses at least equals federal taxes paid it is a very small effort to determine that 22-25% is a very likely number for the potential in reducing producer (sans tax costs) prices.
http://www.heritage.org/Research/Taxes/hl565.cfm
An American Economic Review study found that every dollar of taxes could impose as much as $4 of lost output on the economy, with the probable harm ranging between $1.32 and $1.47
Edgar K. Browning, "On the Marginal Welfare Cost of Taxation," American Economic Review, Vol. 77, No. 1 (March 1987), pp. 11-23.
"Another study in the Journal of Political Economy estimated that the corporate income tax costs more in lost output than it raises for the government."
Jane G. Gravelle and Laurence J. Kotlikoff, "The Incidence and Efficiency Costs of Corporate Taxation When Corporate and Noncorporate Firms Produce the Same Good," Journal of Political Economy, Vol. 97, No. 4 (1989), pp. 749-780.
Chief Executive, The New directions in tax reform -
May 1995.
Tax expert Ernest Christian Jr., a partner with Washington's Patton, Boggs & Blow, reckons these are low estimates or at best incomplete. Citing a U.S. Treasury study which indicates that 6 billion man-hours are consumed each year just in the record keeping for income and payroll tax returns alone, Christian says the true burden on the U.S. economy is probably closer to $1 trillion.
STATEMENT OF REPRESENTATIVE DICK ARMEY
HEARING ON THE IMPACT ON
INDIVIDUALS AND FAMILIES OF REPLACING THE FEDERAL INCOME TAX
Committee on Ways and Means, Full Committee, 4-15-97 TestimonyHinders Economic Opportunity
According to a study by Jane Gravelle, an economist with the Congressional Research Service, and Larry Kotlikoff, an economist at Boston University, the corporate income tax costs the economy more in lost production than it raises in revenue for the Treasury. Dale Jorgenson, the chairman of the Economics Department at Harvard University, found that each extra dollar the government raises in revenue through the current system costs the economy $1.39.