Obama’s Tax Plan Explained So Everyone Can Understand It

If you have ever wondered exactly what happens when taxes are increased on the businesses in our country this video will explain it.  Business pay NO taxes.  Let me say that again so you can grasp it.  Business pay NO taxes.  Now you are probably saying “of course they do, they file tax returns don’t they”.  Yes, they do but businesses only collect taxes and remit them.  Taxes are simply a cost of doing business.  When they go up a business has a couple choices, 1) it can absorb the increased cost and survive on less profit, 2) it can cut costs somewhere else to offset the increase in the taxes, or 3) it has to increase the price it charges on the goods or services it produces.  

Most business are not able to absorb the increased cost so they have to pass the cost along to others.  They do this by cutting costs in another area or by increasing their prices (or both).  If they choose to cut costs, their are two areas where this will fall – employees or suppliers.  The business will negotiate a cheaper price from its suppliers, thus passing the increased taxes on to the suppliers (where they cycle continues and is compounded), or the business will cut labor costs (meaning layoffs or salary cuts), thus passing the increased taxes on to their employees.  

ALL TAXES ARE ULTIMATELY PAID BY INDIVIDUALS.  This is basic economics.  When Obama says that he is going to increase taxes on businesses and wealthy people he either does not understand basic economics or he is hoping  that we don’t.  Either way, he is not someone we need as President.  Watch the short video, it explains this well.