Mr. Johnson: Regardless of what Smithfield’s final tax rate is, and how much (fancy and expensive) accounting is necessary to arrive at the rate, Mr. Pope was merely making the point that taxes paid by corporations become a cost of doing small business advice which the corporation factors into the cost of its products. So, what is a graduated tax rate on the level of taxable business revenue is spread to the product, as a level cost of doing business. This can have the effect of pricing lower income individuals out of the market for some products. That is to say, as the price for a product increases some consumers are priced out of the market.

Another way of looking at it would be to say that corporate taxes are not actually paid by corporations, they actually represent a consumption tax and can dampen demand (particurly in an economy where wages are not increasing). Small businesses and proprietorships also do their best to pass business income taxes on to consumers, as best they can. So your pig farmer neighbor is not insulated from any of the phenomena discussed by Mr. Pope – except perhaps volume and efficiency. If you can’t pass the cost on to those consuming your product, your reward for working is diminished, and at some point you decide to work as a greeter at Wal-Mart. It’s much easier and cleaner than raising hogs.