Taxing corporations is taxing people

Dear Editor:

Corporations are a favorite punching bag of “tax the rich” advocates who variously characterize them as exploiting workers, dishonest, tax cheats, seeking special government favors, greedy, destroying the environment, caring only about profits, having too much power, … .

A corporation is a group of people organized under state law to conduct business, generally with a profit motive. It can be a giant like Walmart, or a tiny business in a family garage, or one of many forms and sizes between these examples. Many large corporations like Apple Computer began in a garage. Are groups of people, including people owning stock as part of retirement planning, inherently dishonest, greedy, etc. because they are part of a successful corporation?

Corporations drive our economy by developing new products or services and creating wealth for its owners. Wealth is created when products or services are sold for a profit. Job creation is not an objective but the result of a profitable and growing business. Jobs created are not for employee convenience but to help the corporation serve customers. In some ways the employee – corporation relationship parallels the corporation – customer relationship. An employee must economically provide a product or service the corporation (customer) needs or the corporation will take its business elsewhere.

Taxing corporations is taxing people. The owners’ tax reduces profits needed for growth, job creation and rewarding employees. For us customers, corporate taxes appear as inflated prices of goods and services we purchase.  Corporations do not pay taxes. People, many of whom are not rich, do!

David Greer
Cambridge

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