John Ransom
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Doctor Roy wrote: I asked this question somewhere last week but didn't get an answer. If Corporations don't really pay income taxes- but instead pass it on to consumers- if a particular corporation pays little or no income tax (and there are many of them) could it then be possible that they are just using the statutory rate instead of their actual rate as an excuse to raise prices and outsource jobs overseas?- Obama's Solution to High Taxes: Even Higher Taxes

Dear Comrade Roy,

To paraphrase the movie Billy Madison, I think we are all a little dumber for having listened to your question here today. Your question is another shining example why liberals should NEVER have anything to do with our economy.

Corporations may pass along corporate taxes to customers, but that doesn’t mean that the tax has no effect on them. When a corporation is saddled with high taxes, they raise the price of the products they sell, which means that they sell fewer products and they do so at a lower profit margin.   



Corporations write checks to the government all the time to pay for taxes on their profits.

If you looked at the financial pages all week last week, companies were reporting “earnings;” that is profits. And profits are what really drive the market.   

There are few GEs out there that pay nothing.

Even assuming that your blended mash of words makes some sense, one should ask why companies are going overseas to start with? Why are other countries lowering their statutory tax rates, as you call them, if it doesn’t make the companies more competitive?

Take Illinois for example- where you live.

Why did the state cut deals with Caterpillar and CME and Jimmy Johns to give them tax breaks AFTER raising the so-called statutory tax on corporate profits? The did it because they realized that if they didn’t those companies would leave the state.

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John Ransom

John Ransom is the Finance Editor for Townhall Finance.