What does pay mean on a statement?

I have heard Ronald Reagan say businesses don't pay taxes only people pay taxes I have heard other people say?

  • I have heard Ronald Reagan say businesses don't pay taxes only people pay taxes I have heard other people say this too what does this statement mean ? http://www.youtube.com/watch?v=A8cF2S4QO_w

  • Answer:

    Business costs, including taxes, are either passed onto the consumers in the form of higher prices, employees in the form of lower wages, or shareholders in the form of lower dividends.

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It means that business tax costs are ultimately passed through to their customers.

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