Policymakers frequently propose taxes on businesses, while claiming to spare them on consumers. While these proposals seem politically more palatable, as an economist, I realize that rising business costs are recouped through higher prices paid for by consumers.
Last month we had an online survey where we asked readers whether an increase in business taxes would or would not affect consumer prices. The survey results found that 92% of consumers believe that increased business taxes would ultimately be passed along to them in the form of higher consumer prices. What this suggests is that consumers are bit more savvy and understanding of basic economics than policy wonks make them out to be.