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Corporate tax is a political sham, a sleight of hand by politicians to make taxes more palatable to voters. There is no such thing as a tax on corporations that

Corporate tax is a political sham, a sleight of hand by politicians to make taxes more palatable to voters. There is no such thing as a tax on corporations that's not a tax on people. Corporate income is either paid out as salaries or dividends, or spent on purchasing goods from other firms (so eventually only dividends and salaries). Taxing corporations means reducing salaries and reducing dividends. The corporate tax also benefits big firms with overseas offices and armies of tax accountants and lawyers, at the expense of small and medium sized businesses that can't afford to play the tax avoidance game. We should eliminate the corporate tax. Make it revenue neutral with equivalent small bumps in the income tax. But it actually doesn't generate much revenue to begin with, more evidence that it's not worth the trouble.

hackerboos 11y ago
It's 11% of the federal budget [1]. We'd be talking about a steep rise on payroll and income taxes to replace it. It would actually be a lot more than 11% if it wasn't for avoidance by multinationals like Apple. [1] - http://www.cbpp.org/sites/default/files/thumbnails/image/policybasics-taxrevenues-f1_rev3-11-15.png http://www.cbpp.org/sites/default/files/thumbnails/image/pol...
- marcoperaza 11y ago
  When you compare it to the income tax, that's not a big percent. The corporate tax is equivalent to an income tax on people, but with the strange property that it distributes the burden between the classes (shareholders vs employees, though there is a lot overlap) through the market instead of by law. Depending on the situation in a particular firm, the burden might be wholly on employees or wholly on shareholders, but probably somewhere in-between. This is all ignoring that some of the burden could be shifted to consumers too, depending on how competitive the market is and what the margins are. As I said, you would raise the income tax on the middle to high brackets to offset abolishing the corporate tax. You'd be taxing the same people, for the same money, with much less hassle for everyone. What does the corporate tax accomplish that an equivalently higher income tax does not? It's the same money.
  - adventured 11y ago
    It would of course be far better than that. The low corporate tax rate would attract vast numbers of relocations. Companies like Pfizer would stop fleeing the US; major corporations in other nations would relocate.
    - marcoperaza 11y ago
      It's really sad that our politics is so dysfunctional that we'd rather hold on to this harmful fiction of a tax, just so some politician can play people against each other, than make common sense reforms that wouldn't even change the total tax level.
- mc808 11y ago
  Cutting the federal budget 11% would throw us all the way back to 2014 levels. I don't know if the system could handle that kind of shock.
- lowpro 11y ago
  Apple is a primary example of his point... If corporate tax isn't eliminated or reduced, will Apple ever put that cash to good use? No! It doesn't want to lose billions, so it'd rather the money sit there then lose it. Removing the tax in that case would stimulate the economy with billions of dollars in new private capital (without devaluing the money already out there [printing money]).

hackerboos 11y ago

It's 11% of the federal budget [1]. We'd be talking about a steep rise on payroll and income taxes to replace it. It would actually be a lot more than 11% if it wasn't for avoidance by multinationals like Apple. [1] - http://www.cbpp.org/sites/default/files/thumbnails/image/policybasics-taxrevenues-f1_rev3-11-15.png http://www.cbpp.org/sites/default/files/thumbnails/image/pol...

marcoperaza 11y ago
When you compare it to the income tax, that's not a big percent. The corporate tax is equivalent to an income tax on people, but with the strange property that it distributes the burden between the classes (shareholders vs employees, though there is a lot overlap) through the market instead of by law. Depending on the situation in a particular firm, the burden might be wholly on employees or wholly on shareholders, but probably somewhere in-between. This is all ignoring that some of the burden could be shifted to consumers too, depending on how competitive the market is and what the margins are. As I said, you would raise the income tax on the middle to high brackets to offset abolishing the corporate tax. You'd be taxing the same people, for the same money, with much less hassle for everyone. What does the corporate tax accomplish that an equivalently higher income tax does not? It's the same money.
- adventured 11y ago
  It would of course be far better than that. The low corporate tax rate would attract vast numbers of relocations. Companies like Pfizer would stop fleeing the US; major corporations in other nations would relocate.
  - marcoperaza 11y ago
    It's really sad that our politics is so dysfunctional that we'd rather hold on to this harmful fiction of a tax, just so some politician can play people against each other, than make common sense reforms that wouldn't even change the total tax level.
mc808 11y ago
Cutting the federal budget 11% would throw us all the way back to 2014 levels. I don't know if the system could handle that kind of shock.
lowpro 11y ago
Apple is a primary example of his point... If corporate tax isn't eliminated or reduced, will Apple ever put that cash to good use? No! It doesn't want to lose billions, so it'd rather the money sit there then lose it. Removing the tax in that case would stimulate the economy with billions of dollars in new private capital (without devaluing the money already out there [printing money]).