With all these stories about Apple doing the Double Irish and Google seemingly using a Dutch Sandwich (both methods of moving profits around so as to reduce the tax paid upon them) it’s worth noting the most important point about the corporate income tax. Companies simply do not pay it. Once we get that idea properly fixed in our minds then it’s possible to think through what might be done about the taxation system.
Clearly, companies do actually hand over the check for the corporate income tax. Well, excepting those companies that have organised themselves to avoid having to do so, obviously. But this isn’t the same, at least not to an economist, as saying that the company is really paying that bill. They’re settling it, certainly, but they’re not carrying the economic burden of the tax.
Who does pay this is the study of tax incidence. We know who the nominal, or statutory, payer is, but who is it that really carries that economic burden, who carries the economic incidence of the corporate income tax?
The Basic Thing To Know About The Corporate Income Tax: Companies Don’t Pay It – Forbes