Competition and taxes

If you give a tax increase to companies, it will hurt workers as everything goes up in price by the same amount. That’s a line against raising taxes, theoretically. It’s a bit like how other politicians claim giving a tax decrease to companies will raise employee paychecks, but the data proves it doesn’t work that way. Without an increase in demand of their products, they don’t need more workers. Without needing more workers, the supply-demand curve doesn’t shift. How many people are buying more toilet paper due to a tax decrease? It doesn’t shift demand for many items.

In some cases, a tax increase will be passed on to the consumer, but at the same time, in highly competitive industries, some companies aren’t going to raise their rates. They are racing to the bottom. That puts pressure on other companies not to raise their prices. Which, means the full tax increase doesn’t hit paychecks as much as corporate profits.