My comments posted in response to this entry over at MaxSpeak, (and edited to make me look good):
Businesses can’t pass income taxes on to customers. Income taxes are not a cost. They are not a component in the price of an item or service. They are calculated based on the overall profitability of the entire business AFTER all sales have been accounted for during the fiscal year, and are unknown at the time of the sale.
Prices are based on what a company can get for its product or service. If the company has room to raise prices, and hasn’t already, then it has not been operating as profitably as it should have been — its management was not competent. A company might be profitable, and its competitor not profitable. Does the profitable company raise its prices to cover the previous year’s tax, leaving its competitor with an advantage?
And if the company DOES successfully raise prices, then it will be much MORE profitable — being profitable already this is a marginal increase in revenue after costs so it ALL goes to the bottom line — and will pay much HIGHER taxes on THOSE profits. Does the business raise prices MORE to pass THOSE taxes on to customers? What kind of circle does this start? Anyway this is just to illustrate that it is a silly idea that a company can pass income taxes on to customers. The whole idea is just more right-wing propaganda.
I wrote about this, and also about whether cutting taxes causes businesses to hire more people here.