Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Corporate Tax Cuts Mean Slow-Arriving Good News

Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Corporate Tax Cuts Mean Slow-Arriving Good News

Article excerpt

Concerned about recent corporate tax cuts? Cheer up; corporations aren't taxpayers; they're tax collectors. Lower corporate taxes mean less will have to be extracted from customers and workers.

Corporate taxes are a cost of doing business. Any business that can't recover its costs goes broke. So management must decide how to recover the taxes. This is pragmatics; which constituency is least able to resist?

Investors typically fire managers who try to dump the taxes on them. We could maintain dividends and cut reinvestment to pay taxes. But this slowly kills the firm as things rust and aren't replaced.

Customers are the obvious next target. If they can't turn to competitors - because those competitors are trying to offload those taxes, too - passing the tax to customers won't hurt the firm. Thus for the 75 percent of U. …

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