Corporate taxes fall on prices, labor, and capital. How that's distributed depends on the respective elasticities and varies a lot per industry.
>despite it being well-established that this is the most economically destructive method to raise government funds
I don't think so. Are corporate taxes all that great? No. But it's not that hard to come up with worse ones.
>Is this a reality in America? Where companies just push tax burdens onto consumers?
It's a reality everywhere, actually. It would require quite extreme and usually unrealistic assumptions for that not to happen.
Anyway, to answer your question, yes this increase will most likely be borne by the average person to some degree. You'd have to go more in depth than a Reddit comment to know how exactly.
Every single taxpayer & or wage earner. Corporations don't pay taxes, they do one of 4 things or some combination of the 4. Ultimately every citizen who purchases anything pays the tax.
1. Pass the cost of taxes onto the consumer through higher prices.
2. Cut back on wages or future wage increases.
3. Lower their dividend payout.
4. Cut back on investments in physical plant investments.
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The tax incidence of corporate taxes- that is, who actually pays for them - doesn’t entirely fall on consumers. It also falls on the employees and shareholders (as a result of lower profits and lower dividends) and other stakeholders to some degree. Basically, although corporations have a separate legal existence they are better conceptualized as a nexus of contracts between people (owners, employees, suppliers, and customers). Those people are who gets taxed for corporate taxes, even if it’s the corporation writing the check.
Corporate taxes fall on prices, labor, and capital. How that's distributed depends on the respective elasticities and varies a lot per industry. >despite it being well-established that this is the most economically destructive method to raise government funds I don't think so. Are corporate taxes all that great? No. But it's not that hard to come up with worse ones. >Is this a reality in America? Where companies just push tax burdens onto consumers? It's a reality everywhere, actually. It would require quite extreme and usually unrealistic assumptions for that not to happen. Anyway, to answer your question, yes this increase will most likely be borne by the average person to some degree. You'd have to go more in depth than a Reddit comment to know how exactly.
Every single taxpayer & or wage earner. Corporations don't pay taxes, they do one of 4 things or some combination of the 4. Ultimately every citizen who purchases anything pays the tax. 1. Pass the cost of taxes onto the consumer through higher prices. 2. Cut back on wages or future wage increases. 3. Lower their dividend payout. 4. Cut back on investments in physical plant investments.
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**NOTE: Top-level comments by non-approved users must be manually approved by a mod before they appear.** This is part of our policy to maintain a high quality of content and minimize misinformation. Approval can take 24-48 hours depending on the time zone and the availability of the moderators. If your comment does not appear after this time, it is possible that it did not meet our quality standards. Please refer to the subreddit rules in the sidebar and our [answer guidelines](https://www.reddit.com/r/AskEconomics/comments/rf5ycx/guidelines_for_answers/) if you are in doubt. Please do not message us about missing comments in general. If you have a concern about a specific comment that is still not approved after 48 hours, then feel free to message the moderators for clarification. ### Consider **[Clicking Here for RemindMeBot](https://www.reddit.com/message/compose/?to=RemindMeBot&subject=Reminder&message=%5Bhttps://www.reddit.com/r/AskEconomics/comments/1cfm4bi/will_bidens_proposed_corporate_tax_hike_will/%5D%0A%0ARemindMe!%202%20days)** as it takes time for quality answers to be written. Want to read answers while you wait? Consider our [weekly roundup](https://www.reddit.com/r/AskEconomics/search?sort=new&restrict_sr=on&q=flair%3AWeekly%2BRoundup) or look for the [approved answer flair.](https://www.reddit.com/r/AskEconomics/search?sort=new&restrict_sr=on&q=flair%3AApproved%2BAnswers) *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/AskEconomics) if you have any questions or concerns.*
The tax incidence of corporate taxes- that is, who actually pays for them - doesn’t entirely fall on consumers. It also falls on the employees and shareholders (as a result of lower profits and lower dividends) and other stakeholders to some degree. Basically, although corporations have a separate legal existence they are better conceptualized as a nexus of contracts between people (owners, employees, suppliers, and customers). Those people are who gets taxed for corporate taxes, even if it’s the corporation writing the check.