George Rebane
A major teaching point of RR over the years has been that corporations pay no taxes. Corporate taxes are another preferred ruse of world governments to enable them to take more out of the pockets of real taxpayers. Now we hear that the OECD is doubling down on the bamboozle with something called the “base erosion and profit shifting” (BEPS) project. BEPS is supposed to stop corporations from paying lower than their ‘fair share’ of taxes. However, as the nearby chart shows, this is a smokescreen since corporations have been doing anything but paying a lower share of the GDP in taxes.
As the 23jul13 WSJ points out, what BEPS promises to do is to make corporate tax planning more complex and in the end raise corporate taxes. The oblivians of the world will raise their voices in another chorus of huzzahs as they promote one more round of slow growth and auto-impoverishment. In reality and “for all the huffing and puffing, there is no crisis of corporate tax collection. The deficits across the developed world are the product of slow economic growth and overspending, not tax evasion. But none of this has stopped the OECD from offering its 15-point plan to increase the cost and complexity of complying with corporate-tax rules.”
The real solution is “everyone (moving) toward lower rates and simpler tax codes, with fewer opportunities for gamesmanship and smaller rate disparities among countries”. But socialism never takes that kind of enlightened view of economic behavior or economies – after all, it smacks of the Laffer curve. But none of these international machinations would be possible if people wizened up and understood the nature and purpose of corporate taxes.
“Whisper it, but corporations don’t pay taxes anyway. They merely collect taxes—from customers via higher prices, shareholders in lower returns, or employees in lower wages and benefits.”
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