The so-called "reconciliation bill" which Sen. Manchin negotiated with Majority Leader Schumer and now agreed to by holdout Sen. Sinema will close tax loopholes on corporations and supposedly does not raise the taxes on those individuals making less than $400,000 per year.
It proudly raises corporate taxes, everyone agrees. So friends, do you suppose the corporations simply dig deep into their pockets and pay up like good little boys and girls? Take it from the old business prof, they do nothing of the sort.
Corporations view taxes they are unable to avoid as part of their cost structure, much as they view raw materials, salaries, R&D, advertising, etc. All of these costs get rolled into the price of the goods and/or services they sell.
Who pays those prices? You do. When corporations' costs go up, their prices go up. Who pays the taxes is you, but they are concealed in the increased prices. "Increased prices" is a prime driver of inflation, to which the new bill will contribute.
The only place I know where you get told what percentage of the price you're paying is taxes is at some gasoline pumps. On some, a sticker tells you this price per gallon includes the following percentage of state and federal taxes.
Make no mistake, whether you are or, much more frequently, are not told how much of the price of what you buy is taxes, they are still there and you are paying them. Count on it.
You may wonder what happens when taxes become so high that passing them on means people no longer buy much of the product? The answer is that production levels drop to what the market will buy at the new higher prices. Under these circumstances, those producers unable to cover costs go out of business. When enough of this happens, you get a recession and unemployment increases.
