The real problem here is that taxation should be progressive. Your marginal income tax rate should increase as a function of your income. It would make a lot of

The real problem here is that taxation should be progressive. Your marginal income tax rate should increase as a function of your income. It would make a lot of sense to reduce taxation at the level of the corporation, but then treat capital gains etc. the same as any other type of income. Yes, that may cause corporations to not pay out profits, but there's nothing wrong with that, because if the profits are not paid out, then the shareholders don't have the problematic high income. If keeping the profit causes share values to rise, then this rise in value should be taxed appropriately according to the same mechanism.