I think it’s stupid too. The whole point of it seems to be to drive corporations and their jobs overseas.
So they can add stealth taxes through higher prices on people who don’t think they’re taxed too much.
Now, of course, I know that it has been proved for hundreds of years that this form of organization makes the best use of capital, by allowing many people to pool capital and therefore accomplish much greater things than any one could as an individual. And that the structure that protects investors from direct risk yields the most wealth for the most people. And that the government doesn't really have any inherent right to tell people how they may or may not associate. Bit it is an interesting question and I do have some difficulty when officers of a corporation can be shielded from consequences of actions that they would be directly liable for if they were individuals.
Personally, I distrust corporations exactly as much as I distrust governmental entities: any time you have power disconnected from responsibility you have abuse; people in large groups are dangerous to individual liberties, be they corporations, unions or governments; the question is only do we derive more benefit than we suffer detriment.
The logic is that the corporation is a separate legal entity from the owners. Under current law if they don’t pay dividends and there is no corporate tax, the corporate income will never be taxed.
Economically the simplest and probably best course would be to treat all corporations as subchapter-S for tax puposes, and pass through all corporate earnings for shareholders to pay income tax on at individual rates, and make all corporate dividends tax free. The government might gain a large amount of tax revenue, because they wouldn’t have to wait until you sell a stock or get a dividend to tax you on the profits of the corpations you own part of.
Because the voting public is STUPID.
Better idea would be to only tax the corps. Let the individuals off the hook.
The same reason that employers are required to pay withhold employees’ income taxes and pay half of employees’ social security and medicare taxes and gasoline taxes are included in the price of gasoline, it is easier to hide the amount of taxes that you pay if you don’t realize you are paying it.
Corporations don’t pay taxes. Only people pay taxes, either the shareholders or the customers through higher prices.
That way the gov’t and unions can blame price increases on evil corporations.
When you get right down to it, that’ as intellectually sophisticated as Rats get on economics, a kid's 1960s comic book!
It's the same on other subjects !
The consumers (us) pay all Corporate taxes. Corp. taxes are put into the price of the goods and profit is projected from that. Let’s say we raise taxes on GM 30%. Watch car pricing go up 35%.
Money is power. The government can’t stand the idea of any entity being able to do as they wish and not controlled by the government.
The "distribution to shareholders" (i.e. dividends) is after income taxes on corporate earnings. The dividends, which represent income that has already been taxed, are then taxed again as personal income to the shareholders.
Why did Willy Sutton rob banks? That’s where the money was.
Like Sutton, no higher rationale is required when it comes to governments selecting its victims.
Now that corporations, which are not citizens since they aren’t even humans, have the right to free political speech, I say let them be taxed. I’d prefer that only the profits that are collected by the shareholders be taxed and that corporations be barred from all political involvement.
Make the corps collect the taxes from people and take the heat.
Corporations are mostly a way for people to hold onto their earned wealth against lawsuits (not counting labor disputes).
Most zero out unless they are some kind of giant with some kind of dispensation from the government.
Three is usually no corporate taxes paid if they do it right.
Or they leave the USA, become global and just do business in the USA taking advantage of NAFTA.
Over taxation just makes wealthier people leave and mostly the middle class and people with welfare government employment or entitlements stick around.
Every tax on a corporagtion is paid for by the consumer after overhed and profit is tacked on!
The problem is the double-taxation that is occurring. The corporations are taxed on their profits and then the shareholders are taxed on the dividends which have already been subject to taxes.