Posted on 09/17/2002 6:37:37 AM PDT by RJCogburn
Why not repeal the corporate income tax? Everyone’s worried about falling stock values, so let’s remove one of the big burdens on corporate profits: the corporate income tax. We shouldn’t do this as a short-term quick fix. The repeal should be permanent.
What? you’re saying. Let those dirty corporations get off tax-free?
Such a reaction would only demonstrate woeful economic illiteracy. As has been wisely said, businesses don’t pay taxes. They collect them. A corporation is not an entity. It’s a relationship among large numbers of people. If you tax “it” you are really taxing those people. The people who pay the tax may be different from the ones you may think are paying it. We can’t say exactly who pays how much of the corporate tax, but we do know that it hits stockholders, employees, and consumers. Most advocates of the corporate tax probably don’t intend to hit the company’s employees and consumers. But they are paying. Since the profits taxed away can’t be invested in capital improvements that raise employee productivity, wages cannot climb. And since those profits can’t be invested in new, better, and cheaper products, consumers pay more for goods than they would otherwise. In both cases, the corporate tax is a real tax on people not usually thought of as its targets.
What about the stockholders? First, stockholders already pay the personal income tax. This includes a tax on dividends and capital gains when they sell their shares for a higher price than they bought them. As you can see, the corporate tax is part of the government’s unconscionable double-tax scheme. Talk about “greed”! Why do the politicians need to tax something twice?
Here’s how it works. The company pays the corporate tax on its profits. If it then distributes the shrunken after-tax profits as dividends, the stockholders pay again when they declare the dividends on their income-tax returns. Where’s the justice?
But those fat cats should pay more taxes, shouldn’t they? Leaving aside the unflattering envy underlying such a remark, we should recall that most stockholders are not terribly wealthy. Half the people in America own stocks, many through their employer and union pension plans and 401(k)s. When profits are reduced through taxation, less money is left with which to enhance companies’ value through investment and new products.
Last year, the corporate tax collected $191.6 billion. That’s money that could have been producing better goods and higher-paying jobs. Instead, the government very likely wasted it, transferring it to those who did not earn it and squandering it on unconstitutional and meddlesome programs.
This is the other side of the tax. First the government takes the money from those who earn it. Then it spends it in ways that do real harm. For example, it uses the money to finance the regulatory regime, which stifles productivity and retards growth in living standards. It would be bad enough if the government just took the money. That it then uses the money to do harm only adds injury to insult.
Unsurprisingly, as the markets skid, all the politicians can talk about is new regulation. This has many reasons. Politicians are devotees of the state. For them, any crisis requires government action. Their definition of “crisis” is: that which requires a government solution. Moreover, members of the House and a third of the Senate are facing reelection in November and they are panicked about being called “do-nothings.” So they are ready to do anything — not because it will fix something, but because it will play well back home in the campaign season. That should make everyone nervous. As an anonymous 19th-century New York judge said, “No man’s life, liberty and property are safe while the legislature is in session.” How true.
President Bush isn’t immune from this influence, even though he doesn’t face reelection until 2004. He’s said he’s ready to sign whatever business-regulation bill that Congress passes. I’m sure that sent a wave of confidence through the trading floors.
There is no way we can tax and regulate the economy out of its doldrums. It needs the weights removed. Let’s repeal the corporate tax and say No to new regulations.
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We take the money from taxing toys and give it to ME! Yeah, that's the ticket!
And maybe you thought I was going somewhere with this?
That's a fact! It is double taxation.
In reality it does not really matter, it is the total collected that is the problem. Any idea that leaving the money with business would be a blessing, is rather doubtful. World competition dictates whether a business succeeds or fails. The government is never going to shrink, always there devouring profits and driving business overseas.
Corporate taxes encourage corporations to locate in other countries. We don't have to worry about an Income Tax encouraging people to locate somewhere else. The more effecient we can make our businesses here at home, the more jobs and better jobs we will have. A low flat income tax is the most efficient.
Get rid of both.
They can't. Our government, run by corporations decided they needed a one world government...they got what the wanted with the WTO (World Trade Organization)...The WTO determined our tax laws concerning tax breaks for corporations are illegal, Republicans agree.
Don't beleive me?
International sanctions may spur tax law reform...Not exactly the kind of "reform" you had in mind.
Our government and the corporations influencing it with their money decided to sleep with the devil...to put it in Ways and Means Chairman Bill Thomas' words (paraphrase) "our days of illegal tax laws are over"...well not illegal to American law but illegal to one worlders law.
What would be the consequences of not collecting this money?
How much, if any, would you recommend raising though some other tax, and if so, what tax?
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"businesses don’t pay taxes. They collect them."
So how is that a burden on profits again?...
Using the wording of the article "the burden" is on the consumer, not the corporate profits.
Removing their tax would mean consumer be damned, And since government spending is on the rise, as usual, it would mean a tax shift as well.
In other words we'd pay the same price for their products AND get a tax increase to subsidise their profits.
Don't know.
What would be the consequences of not collecting this money?
That depends on the pols....hopefully less government spending.
How much, if any, would you recommend raising though some other tax, and if so, what tax?
Raise none...lower and eliminate others.
That's why I said a low flat income tax is best.
Do a little web search on this matter and I'll bet you're in for an eye opening experience. I've also read recently (last 3 months) a magazine article stating the same and even naming names....I'll try to dig it out if I can. Corporate taxes are one reason some companies are moving operations overseas, but I believe cheap labor is a much greater factor. Why don't the cheese heads in Washington offer serious corporate tax rate reductions for keeping JOBS HERE AT HOME?
I agree with you there.
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