Spending our Wealth: Corporate Income Tax

The theme of this “series” is going to be ways that we have positioned ourselves well in the past. These decisions have made us the richest country in the world. This position has allowed us to make different decisions now. First we take on taxing corporations.

Taxing corporations is good politics. They don’t vote. They are inhuman. There are few of them. Many of them have impressively large profits. Good politics != good policy. First defer to Megan:

Let me posit something which isn’t very controversial among tax professors no matter what their political party: you can’t tax a corporation. That’s because corporations have no feelings, and no assets, of their own. Ultimately, the money always comes from some person: customers, employees, owners, or even suppliers.

A look at the current status via Mankiw.

The rest of Megan’s article talks about bad Obama economic policies. The Wire Season 4 episode 4 is titled, “No one wins. One side just loses more slowly.” At the time, he was referring to a football game. I’m starting to feel something similar about politics.

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One Response to Spending our Wealth: Corporate Income Tax

  1. Steve Roth says:

    Megan is right that (she doesn’t say it but) Friedman is right on this one: all corps should be S corps, where shareholders pay taxes on profits whether distributed or not, and corporations pay no tax.

    But Mankiw is utterly misrepresentative in his post.

    http://trueconservative.typepad.com/trueconservative/2008/08/the-mankiw-distortion-field-this-time-corporate-taxes.html

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