What If? U.S. companies had no income tax to pass on to consumers?

Question

No employment tax, no compliance costs, to pass on in their prices?

It is time for H.R. 25, the FairTax Act.

Answer 1

They would just keep the extra profits and keep it for themselves. You actually think they would pass any discount on to the consumer ? No way ! Good Luck ! :)

Answer 2

If companies didn't have to pay any taxes, then you are correct. These savings could be passed on to the consumer.

However, what would compensate for the lost government revenue? Higher income taxes or taxes in other areas.

Short of reducing the cost of government (a whole other debate), the "cost" to individuals would not significantly change. (True, there is a cost to ensuring compliance that could be saved).

That said, this kind of shift may matter. Low income people could buy good/services at a lower price. And higher income people would be paying a lot more in taxes.

Answer 3

Then products would be cheaper (for a while), and the companies could afford to employ more people (for a while). That's assuming, of course, that corporations are all run by saintly people who would much rather pass savings onto customers, and keep a lot of people employed, rather than keep the profits ... because we all know that corporations are *far* more interested in consumers and employees than they are about profit.

But regardless, no consumers could get to the stores to buy those products ... because the government would have no money to build roads.

And even if you were able to walk to the stores, you'd probably be mugged on the way because the government would have no money to pay police with.

So with nobody buying those products, those companies would all go out of business, and all those newly employed people would be out of work again within a few years.

And when those employees lost their jobs, there would be no unemployment aid to help them (because there's no employment tax to pay for it).

In other words, it's great to reduce taxes ... but then you have to ask what government services do you also give up.

Unless of course you are suggesting *tripling* personal income tax to make up for the loss of revenue due to corporate taxes?

Answer 4

It's really getting tiresome seeing your SPAM here. If you wish to get into some misguided political discourse about the "Un-Fair Tax", please post your crap in the Politics section.

This section is for folks to ask questions about tax issues and existing tax law, NOT as a forum for you to push your political agenda.

If you spent as much time carefully examining it and picking it apart looking for holes as I have, you'd see that it was an attempt by the wealthy to break it off in the backside of the poor and middle class while garnering themselves a MAJOR tax break. That and a political football for come worthless Congressman to use to try to help get himself or herself re-elected.

Answer 5

goods would be much cheaper. new business would be created. government would be forced to reduce spending, many of the socialized services we have now like welfare and cooperate subsidies would vanish. inflation would be next to nil.