(This article originally appeared in The Washington Times)
The Biden administration is proposing higher taxes on “the wealthy” and corporations in order for them to “pay their fair share.” Unfortunately, these taxes will ultimately hurt small businesses, too.
To illustrate that point, let’s look at a big corporation. One in my hometown: Comcast.
In 2020, Comcast earned about $20 billion on more than $103 billion of revenue. Not a bad take, right? The company, which owns NBC, theme parks, movie studios and sports teams also provides Internet services to customers in 40 states. Comcast has repeatedly come under fire for poor customer service and antitrust concerns, much of that deserved. But I pick this company because I’m a customer and they are foremost on mind. Why?
Because my Internet service is down! So you would think I’d be ready to complain loudly about Comcast. But I’m not going to do that.
The higher taxes proposed by the Biden administration isn’t going to worry Comcast very much. The company has bigger things to worry about then the U.S. government. It’s got shareholders. And to appease them and their stock price, the company will simply treat those higher taxes like any other cost of doing business and will adjust. How? They’ll certainly raise their prices, which means higher Internet fees for my business. But, more importantly, they’ll be less inclined to spend.
That’s because when costs — like taxes — go up, companies simply adjust their overhead. Which means less hiring, less services and less support for their customers (that’s me!). They’ll also spend less in their communities. So programs this one that gave out to grants to Black business in my city will be impacted. As well as the millions Comcast — like most other large corporations — plows into its charitable foundation that benefits diversity-oriented programs that address digital literacy and community service.
Inhibiting corporations with higher tax rates impacts their investment decisions, too. Without lower capital gains taxes and the “step up” tax advantages that the Biden administration may also remove, would Comcast have built its 59-story tower that, according to an economic impact report, had a total economic impact of $1.7 billion in the city and $2.8 billion in my state through its direct and spillover activities? Perhaps. Perhaps not.