For many years I have heard people say they were not concerned about business taxes because these taxes do not affect them. These people have only demonstrated that they are intellectually challenged.

Companies and individuals are in business to make a profit. In order to make a profit the products or services they provide must include all their costs plus their profit. What are business taxes? Business taxes are one of the costs either in their product or service, on the business as an entity and/or on the net income the business generates.

If a business/individual does not include all costs (taxes included) in the price of their goods and services, then the business/individual will lose money and eventually go bankrupt.

The customer pays the business taxes - the company/individual proprietor writes the checks for taxes. So when the government imposes taxes, fees, assessments, licenses, etc. on businesses, it is an indirect tax on you.

Another myth I have heard many times is that renters do not pay property taxes and are looked down upon by many home owners because of this misunderstanding. Renters do pay property taxes, the landlord only writes the check for the taxes.

One local business owner said "I hope Congress does not pass a new tax reduction bill. I cannot afford another tax reduction. The bill that increased the minimum wage a few years ago almost put me under."

I responded and asked "Were the minimum wage increases that much?" He responded with, "The wage increases were not a burden at all. It was the 50 small business tax provisions in that bill. He said he was lucky because he was able to increase prices enough to cover the tax increases and still stay competitive."

In order to stay in business he had to increase his prices. You, the consumer, paid his tax increases, but he actually wrote the check for the taxes.

Were you told about the 50 small business tax provisions by your Congressional representative or the national news media about these taxes. They were really indirect taxes on you?

So be alert to any tax provisions on businesses in what eventually will become the 2001 tax reduction bill. The politicians and news media will tote that a typical family will receive $xxxx.xx in income tax reductions. But no mention will be made of business tax increases, either through rates; reduction in deductions, exemptions and credits; or other means. These business items will offset the politicians and news media pronouncements.

Also, please watch out for "averages." Here is an example of how averages can distort the truth.

Let's assume that the following were individual tax reductions under the plan Congress passes: 1 individual with a $1 million tax reduction, 1 individual with $500,000 tax reduction, 1 individual with $250,00 tax reduction and 500 individuals with $1,000 tax reduction. The average tax reduction then is $4,473 for each individual. This is the figure you will hear ringing from each politician and the news media, "An average tax reduction per individual of $4,473". Actually, 99% of the individuals would get only a $1,000 tax reduction.

The American people fall for this tactic every time a tax reduction is proposed and passed. It will be the same this time. Most of the tax reductions will be nothing more than a shift in wealth from the middle class to the wealthy. It has worked for 40 years. Why change the strategy now. But at least you will know what really is going on.

As Paul Harvey has always said "Now you know the rest of the story. Good day!"

Respectfully,

-CAFRman
Lieutenant Colonel, USAF, Retired

P.S. I just heard on the news that Governor Davis of California is trying to find another $500 million to buy more energy. I wish someone would tell him that there is $60.94 billion in California's FY 2000 Comprehensive Annual Financial Report (CAFR) that California is not using. Just think of what would happen if the people of California told the Governor where the money was. I can dream can't I? I also believe in miracles. Click here.

"I am only one, but I am one. I cannot do everything, but I can do something. And because I cannot do everything, I will not refuse to do the something that I can do. What I can do, I should do. And what I should do, by the grace of God, I will do." - Edward Everett Hale

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