3.5 Although enterprises serve as conduits for the collection of tax revenue, they are not taxpayers in their own right.

1. The legislator can use enterprises as collectors of tax revenue.

What ways of doing this are good economic organization? Enterprise earnings belong to the providers of their permanent financing in the strict sense (see the chapter on capital). In other words, these earnings belong to those who derive from them, or are likely to derive from them, income from placement in capital, in the unequivocal sense of this last word agreed further on.

2. The ultimate taxpayers are individuals and private associations with a non-commercial purpose.

Some taxes paid by enterprises are added to the prices at which they sell. This is particularly the case with VAT. These indirect taxes are openly borne by ultimate taxpayers. Other taxes paid by enterprises have an effect when they appear or change, and another after them. Corporate income tax is one of them. Initially, these other taxes modify the earnings of enterprises. Sooner or later, their incidence is passed on in the prices at which enterprises sell. This is a consequence of the enterprise's exclusively commercial economic status.

3. All tax levies paid by enterprises are borne by ultimate taxpayers⁹¹.

Parliamentarians, senior civil servants and economists who fail to take this into account take part in a cover-up.

4. Equality before income tax has more virtues than its opposite.

Approval of the progressivity of direct income tax is so widespread that it is necessary to hasten to specify what equality is involved. A short sentence is enough. All income is taxed at one or more identical rates, regardless of whether this income is from labor or placement. The civic virtue of this equality is not the least.

Notes

91. Mainstream public economics states the same principle: “People pay all taxes. When the government levies a tax on a corporation, the corporation is more like a tax collector than a taxpayer. The burden of the tax ultimately falls on people—the owners, customers, or workers of the corporation” (N. Gregory Mankiw, Principles of Economics, 4th ed., chapter “The Design of the Tax System”). Likewise: “ultimately, only people can pay taxes” (Rob Norton, “Corporate Taxation”, The Concise Encyclopedia of Economics, Library of Economics and Liberty). The adage “corporations don’t pay taxes, people do” sums up this consensus. Objective Political Economy departs from it on the channel only: incidence studies share the burden among owners of capital, workers and customers, whereas 3.5 holds that it is passed on, sooner or later, in selling prices. ↩