In the sense of, “Is there a tax applied to some base that is clearly the corporation’s?” I suppose it is. The important question though, is not that. The important question is, “Is it possible to have the cost of a tax fall upon a corporation?”
That answer to that is not so clear.
Corporations own nothing for their own benefit and have no reality outside their charter and bylaws. No corporation can benefit from earning more or less money. They are a financial holding area for the interests of their many stakeholders. A steward in some ways.
Lets examine how a tax affects the stakeholders.
If the tax imposes an additional cost of doing business, then someone must pay for that. It is not different from an increase in the price of a raw material. If no one pays then the corporation must either die or, at best, curtail its possible growth.
If the government stakeholder takes more, other stakeholders must take less and the corporation controls who. If that cannot happen, the business will fall into the dying category because its rate of return on capital is too little to justify its existence.
Corporations are legal entities that act as conduits for other people’s money. It is logically impossible to tax a conduit. If a government increases the tax cost of doing business, that cost will adversely affect other stakeholders.
People who believe that the eventual cost will fall on the corporation itself or on wealthy shareholders are pretty much delusional.
Don Shaughnessy is a retired partner in an international public accounting firm and is now with The Protectors Group, a large personal insurance, employee benefits and investment agency in Peterborough Ontario.
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