4 ms·
Corporate income tax is a bad idea. It should be cut to zero. If you run a corporation, and a larger tax bill comes, you will keep your own salary (hence, weal
by mlsu 2y ago
Corporate income tax is a bad idea. It should be cut to zero.
If you run a corporation, and a larger tax bill comes, you will keep your own salary (hence, wealth) and either pass the tax onto your employees or cut employee benefits/jobs to afford the tax.
With corporate tax in effect what you are doing is handing the responsibility of allocating obligations to the owners/controllers of the corporation. They will definitely choose to pay the tax in a regressive manner.
Instead what must be done is a progressive income tax, enforced evenly, even for owners of corporations. Unsurprisingly, what we are seeing today is an immense tax cut for high earners.
- etchalon 2y agoCorporate income tax exists because S-corps have legally distinct income. If you set that rate to 0, there would be nothing stopping everyone from forming an S corp, transacting solely via that S corp, and evading massive amounts of tax.
- kelnos 2y agoThat's not how taxes work, though. By the time a corporation pays taxes, employees have already been paid, and that's a business expense that hasn't been taxed. Ironically, if you reduce employee salaries or benefits, then you will have lower expenses, and thus a larger amount of profits you have to pay taxes on (regardless of the tax rate). I do agree that corporate tax should be progressive, though, just like personal income taxes are. Corporate taxes used to be progressive, but Trump and the GOP changed that in 2017.
- mdnahas 2y agoFormer quant, current economist here. One policy economists of all stripes agree on is having 0 tax on corporations. We should tax the profits when they show up in the owner’s income. Otherwise, you are taxing owners who are poor. https://www.npr.org/sections/money/2012/07/19/157047211/six-policies-economists-love-and-politicians-hate https://www.npr.org/sections/money/2012/07/19/157047211/six-...