Watching Our Taxes Grow and Flow


                             Who Really Pays the Taxes?

We often hear politicians complain about the Federal Government spending more than it takes in.  Many times these politicians say we should tax businesses (especially big corporations) to get the money government wants to do so many good things for their constituents.  Perhaps the politicians really believe that and it seems most of the public does too.  They are wrong.  Businesses do not pay taxes.  Businesses collect taxes.  Individual customers pay those taxes in the form of higher prices.  That is quite logical and should be readily understood by everyone.

The purpose of any for-profit business is to make as much money as the demand for their product or service and the competition will allow.  To do that, they pass along all costs of doing business to their customers.  All costs include taxes the business has to pay.  Businesses that are able to do that will succeed.  Businesses that can't pass along all costs of doing business, go out of business.  The main thing to remember is that, in the end, taxes are paid by customers.  In the case of Walmart, taxes are paid by Walmart shoppers in higher prices than if there were no tax.  In the case of airlines, taxes are paid by the flying public and persons who ship items by air in higher fares and shipping costs.

There are complex laws and rules governing how operating expenses, material costs, equipment costs, depreciation, labor costs, taxes and other expenses are accounted for. The principal that all taxes are paid by individuals should be clear.  Individuals pay taxes indirectly in higher prices and directly on their wages or investment income.

Some taxes on aviation fuels are directed into an Airport Improvement Program administered by the Federal Aviation Administration (FAA).  The FAA, airport authorities and aircraft owners often behave as if those funds are theirs and should be spent as they see fit even if the expenditure is not cost effective or in the best interest of the taxpayers. 
A prime example of this mind set is the Madison County Executive Airport (MCEA)runway extension project in Meridianville, AL.  In order to extend the runway from 5,000 feet to 6,500 feet, about one mile of new road will be constructed and eight substantial homes will be removed.  The FAA is trying to arrange funding for this project while ignoring the need to improve Pryor Field Regional Airport a few miles west of the MCEA and protect it from encroachment by residential and retail development.  Pryor Field has a 6,100-foot runway and is more convenient to more industries, to Redstone Arsenal and to Huntsville International Airport than the MCEA is.  Residential and industrial development are moving toward Pryor Field which has about three times the number of operations as the MCEA.

The MCEA and apparently the FAA are willing to spend over $8,000,000 to satisfy the desires of a few pilots and aircraft owners at the expense of taxpayers, thousand of motorists using the relocated road and reduced quality of life for residents near the the airport.  It makes no sense.