If you look at the national news, you would think that the oil companies are somehow not being taxed enough. Google News gives you the links. The obvious answer is to tax the living shit out of those oil companies and wipe out their profits, right? That will fix those greedy businessmen.
Only, you can’t tax a corporation. It’s unpossible. What you can do is tax an industry, like the oil industry, say, and watch them pass that cost off to their customers. Because that is what a tax is to a business, it’s an unavoidable expense. The only thing they can do is pass it along to the people who buy the product they are selling.
So, jump right up there and suggest that the government tax the oil companies. It makes the oil companies the collector of taxes from you. They have a tax to pay, they raise their price to pay it. The price at the pump rises, we pay more for fuel and for every product that is delivered by a vehicle that uses fuel. That money goes to the government. It would be more honest if the politicians just taxed you, but they look so good taxing the big bad oil company, they just can’t help themselves.
The total alteration in underlying circumstances has not been squarely faced, As a result, we are guided, in part, by ideas that are relevant to another world. … We do many things that are unnecessary, some that are unwise, and a few that are insane.
–John Kenneth Galbraith