The ability to defer income through capital gains is an extremely limited vehicle to defer income when compared to being able to accumulate profits in a corpora

The ability to defer income through capital gains is an extremely limited vehicle to defer income when compared to being able to accumulate profits in a corporation tax free. Assume that you have a business that generates $500,000 dollars in profits and you'd like to defer taxes. In the US under section 179 you can defer those taxes by investing in depreciating capital equipment such as computers, trucks or medical equipment. Obviously investing in depreciating capital equipment only allows you to defer taxes if it in the future allows you to expand your business and generate at least the same amount of income. In addition to being capped, and phasing out, the rules are very specific to prevent the system from being gamed. For example, you can't use those deductions to invest in real-estate. To effectively defer taxes for 10-20 years would require that over that time you were able to find profitable ways to invest those profits to expand your business. Trust me that finding profitable investments over a 10-20 year horizon is an extremely difficult thing to do and requires significant talent that is in limited supply. Allowing those people to defer taxes and re-invest profits is a win-win-win for the owner, the government and citizens. Compare that to corporations that could accumulate profits tax free. Essentially unlimited amounts of funds could be accumulated in the corporation tax free with no personal obligation to find effective ways to deploy those funds. Those funds can be held and grow tax free until needed in retirement where they can be meted out at favorable tax rates or left for heirs. They would even more favorable than traditional IRA and 401Ks because they wouldn't have required distributions. While its true that corporate taxes in the US are out-of-line with other developed economies which has distorted the economy in some ways dramatically lowering corporate tax rates without implementing rules requiring distribution of corporate profits and implementing taxes on a foreign holders creates a tax loophole so large that you could drive a truck through it. Of course you'll hear the Wall Street Journal talk about how this is 'good' for the US economy because it will allow corporation to 'reinvest' which will lead to all sorts of good things for everybody but the corporate owners. Oddly enough there is never talk about expanding limits on 401K's and IRAs and allowing the middle class to defer taxes.