They don’t pay taxes, Uncle Sam I Am

They don’t pay taxes in a box, They don’t pay taxes with a fox, They don’t pay taxes in the air, They don’t pay taxes anywhere, They don’t pay taxes, Uncle Sam I Am. Apologies to Dr. Seuss.

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The “they” that the rhyme refers to is companies. I’m about to make a statement that is very complex, and it will take a lot of brain power to wrap your head around it. (My tongue is in my cheek, BTW) Here it is. Companies don’t pay taxes, ever. Never, never, never, never, never, never. Taxes represent one of the many costs of doing business. A few of the other costs are rent, payroll, raw materials, insurance, and advertising. All of these various costs are considered when a company puts a price tag on whatever products or services sold by that company. If any one of those costs goes up, the price goes up. Period. Rent goes up, prices go up. Raw materials go up, prices go up. Taxes go up. Prices go up. Complicated, huh? Okay, I know I’m over simplifying. Instead of raising prices, they may lay off a bunch of people. Isn’t that a wonderful alternative? Companies put their capital at risk. Risk means that they may win, but they may lose. The riskier the business, the greater profit they will need to justify the risk. If costs rise to a point where they don’t make a profit, or not enough profit to justify the risk they are taking, they go out of business. What is the point of putting capital at risk if there is no possibility of a reward? Why do I bring this up? Glad you asked. In order to grease the wheels of the Heath Scare Bill, (no, it’s not a typo), our elected officials have decided to put a 40 percent tax on “Cadillac” insurance plans. I think that the current definition of a Cadillac plan is one where the premiums are 23,000 dollars per year. The article I read on it made a point of saying the tax is paid by the company, and not the customer. This raises a very important question. Oh yeah??????? Companies don’t pay taxes. Customers pay taxes. Nobody else pays taxes. Only customers. Get it? Taxing companies is just one more way of taxing us without seeming to. Can you spell stealth tax? Forty percent. FORTY PERCENT!!!!! That’s a huge pill to swallow. Only the insurance company won’t swallow it. Customers will. The only question is, will the insurance companies pass that tax only back to customers of those “Cadillac” plans, raising their premiums by forty percent. Possible, but a more likely scenario is that they will spread it out over their entire customer base, raising premium costs for EVERYONE. One of the whole points of health scare plan is to force insurance companies to lower premiums. In what alternate universe does it make sense to force a company to lower prices by socking it with a 40 percent tax? The very idea just staggers the imagination. It rates right up there with perpetual motion, or lifting yourself up by your own bootstraps. Of course, the President Obama, Harry Reid, Nancy Pelosi will claim that it is not a tax on us, since we will be paying indirectly. And I guess that technically they are right. But, when the government takes an action, and I have to pay more money because of that action, and the extra money that I pay ends up in the coffers of the US Treasury, it sure feels like a tax to me. What’s the old saying? Something about “if it quacks like a duck,……………” That’s the way I see it.