We don't get something for nothing.
The new tax plan will give taxpayers about $100
billion in personal income tax breaks. However, to stay "revenue-neutral" and not exacerbate the horrendous deficit,
the plan will collect about $100 billion more from businesses.
What this means for the average taxpayer is
clear, although rarely mentioned in even "complete"
analyses: What we gain in lower income taxes we'll lose in
higher prices, as businesses simply pass on their higher taxes
to us, the consumers. The much ballyhooed increased
progressivity of the income tax, with closed loopholes,
hopefully, more than making up for lowered rates, will be offset
by the much less ballyhooed increased regressivity of business
taxes, virtual "value-added" sales taxes.
This ultimately regressive effect of simplistic
business taxes was once even pointed out by President Reagan,
who was, unfortunately, criticized by those righteously
indignant over huge, profitable corporations paying little or no
If we want to stop huge, profitable corporations
from paying little or no taxes, then we must enact legislation
preventing them from passing on to consumers their added taxes;
and also, we must plug those loopholes that allow especially
their highest paid executives to hide much of their real
income from progressive income taxes -- a corporation is simply
a group of individuals.
Although the polls show the average citizen
finds progressive taxes wise and fair but regressive taxes
unwise and unfair, the inevitable costs of more regressive
business taxes go largely unmentioned; but the lump-sum rewards
of, hopefully, more progressive income taxes go widely heralded.
But even as the politicians pat themselves on the back come
election time for their "monumental" (read, "much ado
about nothing") tax overhaul, we must never forget that we
don't get something for nothing!