Yes, don’t play with the rate — just get rid of the whole overhead accounting structure necessary for corporations to do tax collection for Leviathan. And she’s right about the differential effects of (big business) regulations on small business as well.
5 thoughts on “The Corporate Income Tax”
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While it should be eliminated, I doubt it ever will be. For one thing, the government likes having corporations be their collection agency. The government can then point at the “greedy corporations” for passing along the cost of taxes and regulatory compliance in the price of their goods and services. Funny how the political class isn’t called out for being greedy for demanding ever increasing amounts of money to fund their pet programs and corruption.
That leads to another reason why the corporate income tax will likely never be repealed – it serves as a powerful incentive for corportations to bribe the political class for special treatment and exemptions. While they call them “campaign contributions”, they’re legal forms of bribery because the political class made that form of bribery legal.
While I agree with her overall premise, pretty quickly she exasperated me with this mantra:
“…maybe even an increase in rates for higher brackets if that’s necessary to keep the thing revenue neutral…”
About half of Americans pay no federal income tax. Why doesn’t the hue and cry for paying your fair share apply to all Americans? Why concede the possibility of even more taxes on the rich without acknowledging that the current law for the lower spectrum of earners needs to be reviewed for sustainability?
I do like her simplification argument regarding corporate taxation…it seems this approach might also reduce the bloated federal beauracracy “necessary” to support it.
Why doesn’t the hue and cry for paying your fair share apply to all Americans? Why concede the possibility of even more taxes on the rich without acknowledging that the current law for the lower spectrum of earners needs to be reviewed for sustainability?
You know the answer to that as well as I do. There’s an entire political party that depends on buying votes by promising “free stuff” to more and more people.
Eliminating corporate taxes would necessitate eliminating Sub Chapter S, Sole Proprietor, Limited Liability Company (LLC), and Partnership taxes for fairness. The first thing is to eliminate the double taxation on Chapter C dividends, making them a Corporate expense, with the dividend recipient liable for any tax. If all business “income” is taxed at the same (say 20%) rate, then the type of business generating the income becomes immaterial.
Eliminate corporate income tax. When corporate money becomes individual benefit it should be treated as ordinary individual income. Include benefits and the “corporate executive condo” as part of that. Go with a flat rate individual income tax and the accounting of which specific individual got what share of a benefit isn’t needed to figure the tax to be paid.
As far as tax rates, I have strong reason to believe that net marginal tax rates much beyond 30%, including state and local taxes, are futile for revenue purposes.