So the NHTSA is looking to sock Toyota with a $16 million fine for keeping quiet about that little pedal problem on some of their vehicles.
Let’s see who paid attention in Economics 101:
Who gets to pay that fine in the end, when all the spreadsheets are tabulated and added up?
a.) Toyota’s stockholders
b.) Toyota’s executives
c.) Toyota’s customers
If you answered a.) or b.), you snoozed right through basic economics in college, or never cracked open a book on more complex economics issues than If You Give A Mouse A Cookie. If you answered c.), you may pat yourself on the back, because you are–of course–100% correct. In the end, Toyota’s customers will pay that government fine, because Toyota will simply roll those sixteen mil into the cost of your new Priuses (Prii?) and Tundras, Mr. and Mrs. Sixpack.
Corporations don’t pay taxes or fines; their customers do. If a corporation gets socked with a tax or fine of X dollars, they will invariably come up with the scratch by either raising the aggregate price of their product by those X dollars, laying off enough people to save those X dollars, or employ a combination of those two measures. There are no exceptions to this rule. At no point will the CEO of MegaCorp go “aw, shucks“, open his personal safe, and conjure up those X dollars from some nebulous stash of ill-gained profits.
Regulatory corporate fines and “windfall” taxes exist for one purpose only. They exist so that a bunch of pencil-pushing bureaucrats can appear to be “doing something” against a perceived problem, and in the process justify the bureaucracy that lets them suck off the public teat without having to do any useful work. In the end, it’s a tax on the consumer–it’s just so widely dispersed that most people don’t recognize it as such. But whatever you want to call it, the end effect is the transference of money from Joe Sixpack’s wallet into a government account, with the corporation acting as the collection agent.