The wrong approach

After reading “Yellen seeks global corporate tax” in the April 6 Spokesman-Review, I think U.S. Treasury Secretary Janet Yellen’s proposed adoption of a minimum global corporate income tax is the wrong approach.

Businesses and corporations don’t actually pay tax. A business tax is in effect a pass-through tax to the consumers included in the goods and services that they sell to consumers, you and me.

A tax on a business is a cost, like wages, material and overhead etc. that needs to be recovered through their product or service pricing. The owners and or shareholders need retain a return on their investment to continue in business.

A tax increase forces an increase of price making the business less competitive with offshore sources, encouraging corporations to consider moving offshore, leaving their employees without jobs.

Yes, I know tax the big corporations they have lots of money. Just where do you think they get that money, you and I, the consumers.

Also, this pass-through tax is disproportionately applied to low-income workers who can least afford to pay it.

A better method for the federal government to get revenue would be to increase tax on high income people directly.

In my opinion the Washington state B&O tax is inappropriate for the same reasons. It’s been many years since I’ve been in business but I doubt that it has changed much.

Jim Hiller

Spokane