09/15/2024
To begin this, I want you to know that I’m an avowed independent and I certainly don’t like the choices we have in this upcoming election.
I spent my professional life as a CFO and the one thing that I can tell you without question is that the proposed increase in corporate taxes from 21% to 28% is a smoke and mirrors political game. Corporations will factor in this tax increase into the cost of the products and services they provide.
Corporations don’t pay taxes, individuals like you and me pay those taxes because they are passed through to us in the form of higher prices. As a CFO, I developed a budget each fiscal year and projected any know increases into the cost of doing business. If I knew the cost of a product that we used was going to increase, I reflected that increased cost into the budget, and then I had to increase top line revenues to achieve the expected bottom-line returns. This revenue increase could be accomplished simply by an increase in market share for services or product sales or AN INCREASE IN THE ITEM PRICE OF THOSE SERVICES OR PRODUCT SALES. It’s the same with taxes!
And, it will have a domino effect because all of the supply businesses that provide parts and services to the businesses selling to the public, will have to do the same process.
The individual tax cuts that are proposed are minor in their comparison to the volume increase in tax revenues that the corporate tax increases will bring into the federal coffers. The net sum increase will have a two-fold effect. More money for the federal government to spend and again, higher prices for you and me when the corporations pass these tax increases through to us, THE BUYING PUBLIC. It won’t hurt the wealthy, but it will certainly hurt those in the lower income brackets, and it will have a marginal effect on the middle-income class.
While you may see a smaller tax burden when you file your future tax returns, any money that you saved will be consumed by the increasing inflation. So, that fancy latte you love? It might cost an extra dime or quarter because of corporate tax increases.
