Wrong presumption in taxation

Regarding Franz Pichler’s Dec. 6 letter, “Immoral accumulation of wealth” (which was a reply to Joseph Jaworski’s Dec. 2 letter, “What’s wrong with [tax] avoidance?“): Pichler states that he has never heard of double, triple or even quadruple taxation in the way Jaworski uses it. A simple example of quadruple taxation would be a corporation paying taxes on income, sales, gasoline and payroll.

Pichler also states that it is immoral for a corporation to be a ["parasite on an economy by accepting incentives to set up business"] and not give “income back to society.” But what does Pichler mean by “society”? The “society” from which a corporation gets its income is otherwise known as the “free market.” Does Pichler want corporations to give income back to the free market!?

Actually when Pichler talks about giving income back to society, he is really talking about giving income to the government. But a corporation cannot give income back to the government, because a corporation does not get its income from the government to begin with! Pichler is resorting to deceptive word games to justify ripping off corporations. In any case, a corporate income tax is viewed by the corporation as a cost of doing business, which is ultimately passed on to the consumer in the form of higher prices.

The presumption behind a corporate income tax is that the government can spend money more effectively than the corporation can. Yet, consider that both Federal Express and United Parcel Service are taking business away from the U.S. government-run postal service. We all pay for the government’s mistakes in the form of higher prices and higher unemployment.

brian farmer
tokyo

The opinions expressed in this letter to the editor are the writer’s own and do not necessarily reflect the policies of The Japan Times.