Joe Biden’s speechwriters have found another familiar far-left progressive talking point to exploit. The president’s prompter and note cards include the “not a penny” trope regarding corporate income taxes. Of course, the corporate media eagerly repeats and amplifies this message, just as it does everything else peddled by the White House.
Biden’s distressed tone refers to the fact that some of America’s largest corporations paid corporate tax in 2020 at either a meager rate or a rate of zero. It reflects the truth of politicians’ rigging of the tax code and the high connection to favor those corporations. The problem with Biden’s analysis is that corporations are, and have always been, legal fictions by design.
Shareholders own corporations, and ultimately by human beings. Stock ownership is essentially deferred consumption, as people decide to invest their money in businesses rather than spend it. They hope that the businesses they invest in will grow, produce income, and become more valuable to their future value will be greater than they are today.
After paying taxes on their income and capital investments, corporate shareholders purchase these ownership interests with their leftover money. As the media loves to report as if it is “evil,” about 85 percent of publicly traded stocks are owned by the top 10 percent of American earners.
However, there is nothing evil about that statistic. Most people do not have much money left after paying for essential items to invest in corporate stocks. This fact serves as a reminder of how vital wealthy and wealthy people are to human progress. Because the rich have money to invest, they look for businesses best suited to satisfy human needs and operate efficiently and in more environmentally sustainable ways.
And because investing involves risk, stock purchasers are highly incentivized to seek out companies with solid prospects for future growth as investment opportunities.
Again, the point is that corporations are owned by people, and usually by people who are highly taxed on their personal and investment incomes. The entire Democratic script about corporations paying a “fair share” boils down to saying individuals should be taxed more on their gains that have already been taxed at least once.
Alert Americans will do well to be aware of the sleight of hand used by Democrats and the Biden administration to insist on higher corporate taxes. Taxes on corporations are always taxes on individuals and disincentivize investment in growth and innovation that fuels human progress and wellbeing.