The Truth on Corporate Taxation: A Conservative Response
There are many Americans who feel that corporations are amassing exorbitant amounts of wealth at the expense of the working public. The biggest target in recent years has been the oil companies. High profile politicians including President Obama, Nancy Pelosi, Harry Reid, and Hillary Clinton have all vowed to raise taxes on the oil companies believing they are making too much money while the consumers pay high gas prices. But the truth is, taxing corporations only hurts us, not them.
Publicly traded companies are owned by the public. Shareholders are not necessarily some old, fat, white guys that wear $4000 suits. Shareholders have invested their own money into companies to help them grow, so the company is responsible to pay them back and reward their personal, financial risks. So, when the government adds more taxes to corporations, corporations are as thrilled as small-business owners are in paying more tax. Put yourself in their place. If you were taxed at a higher rate, what would you do? You would either cut your expenses, or figure out other means to raise revenue so your lifestyle is affected in the most minuscule way. Corporations behave in much the same fashion. They are made up of people who, like the rest of us, do not want to suffer under more tax! So, they make similar adjustments to keep their margins the same and their investors happy.
Who are the shareholders of the oil companies? The American public! Consider that mutual funds hold about 30% of all oil companies’ stocks. Pension funds hold 27%, individual investors hold 23%, and IRA’s hold 14%. Corporate management holds a whopping 1.5%. What all this means is that oil company profits are building retirement accounts of the American public, not just padding corporate pockets. So, when the government taxes corporations heavily, your retirement could potentially be directly affected.
Part of the President’s campaign is a promise to raise taxes on oil companies. This has been advertised on such websites as ESPN.com. What does this mean for the consumer? It means the price of gasoline will go up. Right now, gasoline is taxed by the Federal government by 18.4 cents per gallon. Additionally, states tax gasoline as well. Currently my home state of Colorado adds 40.4 cents to each gallon. So, if corporations are taxed at a higher rate, what does this say about the President’s said concern over gas prices for the middle class? It either means he’s lying or that he expects oil companies just to absorb new taxes and not change their prices to cover more costs. Not raising prices means a company must cut expenses would could include job cuts. More taxation means more pain at the pump.
Corporate taxation hurts the American public and the economy. The taxes only raise prices and limit the expansion of economic growth. Corporations make wads of money because consumers buy the majority of their goods from corporations! It’s also because of corporations that goods can be so affordable. Imagine life without Walmart or Target. Corporations are made up of normal people that make things we all want. If you want to pay more for the everyday things you purchase, vote for the party that wants to tax corporations more heavily.