I would think that a flat personal income tax with no corporate tax would have far less conformance costs than either a the current income tax or the Fair Tax,
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well I would think it would be a lot cheaper to tax corps instead of people for several reasons:
1) a lot more people than corps
2) corps already have accountants and can benefit from economies of scale
3) a registered corp is less likely to engage in illegal activity than people
1) a lot more people than corps
2) corps already have accountants and can benefit from economies of scale
3) a registered corp is less likely to engage in illegal activity than people
Good arguments for lower compliance costs, I guess.
However, if you only tax business income, small businesses will just shift the income to personal income by the owners.
Large businesses will reinvest revenues and grant dividends to shareholders. The company will grow in value, but due to reinvesting revenues, but those aren't taxable profits.
I guess you could just tax all revenue, but that screws over efficient companies that work on low margins.
However the biggest problem with having American companies bear all the tax burden, is that it will drive American companies into bankruptcy in droves as outsourcing labor to foreign countries and buying imported goods would be far cheaper than hiring an American company to provide services, or to buy American goods.
Shifting more tax burden to businesses means making American businesses less competitive in the world market. It won't help the American people, because the American people need jobs.