29 June 2012

A Fashionable Political Lie

"Any tax on business is just passed along to the consumer."

This is a great example of a statement that has evolved from a real truth ("Taxes on business are sometimes just passed along to the consumer") to a flat statement, easier to remember but simply false. And it seems to have become increasingly popular.

The equivalent would be,
"Any tax on employees is just passed along to the business that employs them."

It is true that some employees just lose take home pay and that others are able to negotiate higher pay so that the employer, the business, essentially pays the tax. The same is true of businesses. Some can simply charge more for their products, passing along the costs of taxes to the consumer, and some can't.

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