When you buy stuff, you pay "embedded" taxes.
Corporations have to cover all costs in the price of their products. Taxation is a cost.

- It does NOT show on your cash register ticket.
- This form of taxation hits low income folks the hardest because it's a higher percentage of their income.

 

Fictitious names used in this illustration.

ZACME MOLDING CO.

makes rubber grommets

Corporate taxes levied by state and federal on Zacme Molding.

Zacme Molding sells grommets to Shiny Parts, and the price of the grommets includes the cost of taxes levied on Zacme. So Shiny pays the tax for Zacme.

SHINY PARTS CO.

makes metal computer box

Corporate taxes levied by state and federal on Shiny Parts.

Shiny Parts sells metal boxes with grommets in them to Bigtek Computers, and the price of the metal box includes the cost of taxes levied on Zacme and Shiny. So Bigtek pays the taxes.

BIGTEK COMPUTER CO.

makes computer assemblies

Corporate taxes levied by state and federal on Bigtek.

Bigtek Computers sells computer assemblies to Fast Engines, and the price of computer assemblies includes cost of taxes levied on Zacme and Shiny and Bigtek, and all the other suppliers of parts in that box. So Fast Engines pays the taxes.

FAST ENGINE CO.

builds automobile motors

Corporate taxes levied by state and federal on Fast Engines.

Fast Engines sells motors to Awesome Cars, and the price of the motors includes cost of taxes levied on Zacme and Shiny and Bigtek and Fast Engines, and all the other suppliers of parts and assemblies. So Awesome pays the taxes.

AWESOME CAR CO.

builds family sedans

Corporate taxes levied by state and federal on Awesome Cars.

CAR Transport CO.

hauls cars to dealers

Corporate taxes levied by state and federal on Car Transport.

Finally the dealer

When you buy a car, the price includes the cost of corporate taxes levied on all the manufactures of all the parts in the car, and all the companies who made it possible for that car to be available at the dealer. YOU PAY! And it's about 23%, or more, of the total cost! Before any sale taxes.

  • Every part in any product you buy, services too, experiences a similar tax burden trail.
  • And it's not just the taxes, it's also the cost of complying with the tax code, like extra employees to process it.
  • You pay the taxes levied on every company that makes a part in any product you buy.
  • No matter where you look, ALL taxes are paid ONLY by the the common citizen.
  • Your income taxes may be small compared to the taxes you pay when you buy stuff, and those taxes are hidden.
  • And if you buy a lot of stuff... well, you get the picture.
  • Now it's your turn: you pick any product, and see if you can trace the tax burden, and figure out who pays.
  • And don't forget the cost of collecting and processing all this tax action. That's also included in the price of products.
  • The point is, when a tax is levied against a corporation, that corporation just includes the cost of that tax (and the cost of complying with the tax laws) in the price of its product or service. So the customer pays the tax. This applies at any level, and flows all the way to the private citizen who ultimately pays all the taxes. Sometimes it's a long chain, but all the links are connected, and at the bottom of any product tax chain, is the private citizen. So, corporations collect taxes for the government, they don't pay taxes. It's just another way the government gets your money! The embedded cost ranges from 22% to 30%, depending on the product.

    - This would be fixed with the Fair Tax as defined in H.R.25 and S.122. More info.

    go to National Debt Awareness Center web site.

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