An Economics Question For George Will

During the Roundtable portion of This Week, George Will spoke out against a proposal to tax makers of medical devices:

This is a $1.3 trillion program that leaves 25 million Americans still uninsured and includes, for example, $40 billion tax on the makers of medical devices.

Now, we all know, Arianna, corporations do not pay taxes; they collect taxes. It will be passed on as a cost of doing business to the great American public, which was, the president said, immune from any tax increases.

If we listen to George Will here, raising taxes will harm consumers, but not corporations which can pass on the taxes as a cost of doing business. I guess that to conservatives the rules of economics are different for corporations as opposed to small businesses on this issue. How many times have we heard claims from Republicans that even small increases in the marginal tax rate (which won’t even impact most small businessmen) will seriously hurt small business? How come corporations can so easily pass on an entire tax increase to the public, but small businessmen will go out of business if their taxes are raised?

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1 Comment

  1. 1
    Eclectic Radical says:

     
    Well, let’s at least be honest about whom to blame. A la actual economics.
     
    As much as conservatives and corporations like to claim otherwise, higher costs are not directly responsible for price hikes. They are responsible for smaller profits. Corporations make the decision to raise prices to increase profits. No one holds a gun to anyone’s head and makes them raise prices.
     
    One can certainly argue whether such price increases are or are not justified. However, it’s important to understand where the responsibility for those increases (justified or unjustified) lies.
     

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