Last week commander-in-thief president Obama proposed a $10 per barrel tax on oil. Finally someone’s gonna make big oil pay up and force them to share those juicy profits they’re stashing away in the Caymans, right? I knew Obama could be counted on to get the 1%! He’s the best president ever. Now all we need is Bernie Sanders 2016 to tax the banks and hedge funds. Then we can get tons of free sh*t from government.

Said idiotic worldview is extremely prevalent amongst voters in the developed world. Possibly nowhere more so than in the United States. People have been screaming for this for years. When I was lecturing at an American University, students would say things like this whenever they were given the opportunity. They were wildly lauded for it by their fellow classmates and all professors (apart from me). So we all know where such views come from.

But why are they wrong and who really pays taxes?

 

 

A TAX ON A THING IS A TAX ON YOU

You can tax companies and their products all you want but all you’re really doing is tax yourself. Companies have their profit margins to maintain. Without profits, nothing gets produced, no one gets paid, there’s no investment and no surplus to spend on innovation. The same principle apply in any industry. Levy a 10% tax on hamburgers and once the effect of this starts eating away at Burger King’s profits, they’ll be forced to raise prices in one way or another. Ultimately customers will always pay for any tax on a company or the product they make.

oiltaxisataxonyouWith oil, seeing as it’s used in the production of so many of products and in the transportation of all of them, this hits more or less everyone. Even if you don’t own a car, the things you eat are likely transported using one.

The people egging such tax increases on are in essence begging government to reach its thieving hand deeper into their pockets

This is one of the primary reason why, despite all our technological labor saving productivity raising improvements over the past decades, our purchasing power doesn’t seem to ever go up. The more stealth taxes such as this oil tax that are implemented, the less able companies are to pass their savings on to you in the form of lower prices. A tax can masquerade as penalty on someone or something else all it wants.

That doesn’t change the fact that a barrel of oil is no more capable of paying it than it is of flying like a bird. Things and companies don’t pay taxes. Consumers do! Obama, the thief that he is, is fully aware of this. Too bad the people he rob is not.

 

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