Corporate Income Tax Is a Game No One Wins
Megan McArdle thinks we should get rid of it entirely
By Kevin Spak, Newser User
Posted Jul 17, 2014 1:44 PM CDT
   (Shutterstock)

(Newser) – This week, Treasury Secretary Jack Lew asked Congress to make it harder for US corporations to evade taxes by being "acquired" by a foreign corporation in a low-tax country. It's the latest in the long back-and-forth game of corporate taxation, writes Megan McArdle at Bloomberg. For every move the government makes to try to close loopholes, business comes up with a counter move—and all of those moves wind up draining money from the economy. "I've got a better idea," she writes. "What if we made our tax system so attractive to corporations that they would have no interest in moving themselves abroad?"

Yes, McArdle's radical suggestion is that we eliminate corporate income taxes entirely. "There is no such thing as a fair, simple corporate tax code that can't be gamed," she reasons, because you need to take into account corporate expenses, which turns out to be inherently complicated. Besides, "you can't tax a corporation at all. All 'corporate taxes' ultimately come out of the pocket of some person: an owner, a manager, a customer, an employee." So let's cut the middle man and tax those individuals directly, raising taxes on the wealthy and taxing capital gains as regular income. Then we can "stop wasting everyone's time and money on this insane, unwinnable chess game." (Click for the full column.)

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kajidono
Jul 24, 2014 1:51 AM CDT
Capital gains are already taxed as regular income at 39%. Of course as soon as that bill passed raising the rate from 15%, they went right back to parroting how they weren't taxed at all. And all the peasants bought right into it without checking, as usual. By the way, Canada dropped their corporate tax rates to 15% and businesses are flooding in from all over the world, so it does work no matter how much you don't want it to.
Smitt
Jul 23, 2014 7:46 PM CDT
Good idea. Give Corporations all the benefits of our society and none of the responsibilities. Let someone else pay for the infrastructure that moves their goods and services, and the courts that enforce their contracts and patents, and the police who protect their persons and property.
Lefty_Libby
Jul 20, 2014 9:02 PM CDT
http://www.theatlantic.com/business/archive/2012/09/rich-americans-arent-the-real-job-creators/262833/ Rich Americans Aren't the Real Job Creators, Nick Hanauer, Sep 27 2012 The crony capitalism that we have allowed to infect the U.S. economic system shares weaknesses with communism. A tax system that amplifies compounding advantages for business-people and corporations the higher up the food chain they go and compounds disadvantages for people at the bottom is bad for business....The healthiest ecosystem or economy is one with the most diverse, able competitors, not one overrun with one or two dominant species. If capitalists create ideas that produce social and economic value, then it is obvious why it makes so little sense to pour more money into the already wealthy and successful. ... It would be far better for our country to enable every citizen to participate in our capitalist economy by ensuring that they have the requisite education and access to capital and training to convert those ideas into products that solve the world's problems.