BRUCE BARTLETT explains it in the article that Corporations are Artificial Vehicles created by the US Federal Government through laws and those laws specify what constitutes a Corporation. Bruce Bartlett makes a good point in the article too that corporations cannot raise prices to compensate for the corporate income tax because they will be undercut by businesses to which the tax does not apply. It should also be noted that the states have substantially different corporate tax regimes, including some that do not tax corporations at all, and we do not observe that prices for goods and services vary from state to state depending on its taxation of corporations.<quoted text>I am curious about your discription of 'artificial vehicles', in what way do you mean that?
In my opinion, the end consumer of any product or service is the one that pays all of any company taxes. Taxes are a business expense that must be passed on. That may be an opinion of semantics but it seems a law of economics too.
That leaves two remaining groups that may bear the burden of the corporate tax: workers and shareholders.
In 1962, the University of Chicago economist Arnold C. Harberger, published an important article arguing that the corporate tax was borne entirely by shareholders. This was unquestionably true in the first instance; that is, when the corporate income tax was first imposed. The tax simply reduced corporate profits and had to come out of the pockets of shareholders, given that it could not be shifted onto consumers.
But as time went by, some economists argued that a substantial portion of the corporate income tax was ultimately paid by workers in the form of lower wages. This resulted because the supply of capital would shrink in order to raise the rate of return on capital. A smaller capital stock would reduce the productivity of labor and cause real wages to be lower in the long run.
Who Pays the Corporate Income Tax
The Incidence of the Corporation Income Tax