Friedman-Reich FAQ > Friedman-Reich > If corporations don't pay taxes, will my taxes go up?
Corporations don't pay taxes now! We are paying that tax through higher prices, lower wages, or reduced profit distributed to our 401(k), IRA, 529, and other personal investments.
Corporations are artificial entities and as such are just passing the tax from us to the government. In the process they spend millions on tax accountants, tax attorneys, and lobbyists, to either avoid taxes, reduce taxes by special credits or subsidies, or to arrange for other special treatment. Think about the special tax treatment manufacturers of wooden toy arrows received in the Troubled Asset Relief Program (TARP)!
Ending double taxation will make all of that unnecessary and unjustified.
Furthermore, it will make corporate accounting more transparent. If shareholders are paying business taxes directly corporations will be hard pressed to justify to them why golden parachutes or corporate jets are required to conduct the business of the corporation. These may be exaggerated examples, but any deduction of business expenses from corporate profits is in effect subsidized by all tax payers. If theses expenses are instead paid directly by the owners of the corporations, greater discretion and accountability will result.
The net is there will be more money in the hands of individuals.