Friday, August 29, 2014

Why Corporate Taxes Are Good... And Their Abolition Bad

Alan: The abolition of corporate taxes would eliminate government's ability to use taxation as carrot or stick - rather like "going into a fight" with both hands tied. Instead, lower a corporation's tax rate only to the extent that it creates new jobs. The more jobs a corporation creates, the lower its tax rate - all the way down to zero. (Clearly, the rest of the tax code requires reformation as well.)


Why corporate taxes are good for you. "Burger King’s proposed move to Canada is just the latest in a series of 'inversion' transactions....These increasingly common transactions have led some observers to question whether we need to tax corporations at all. For example, Greg Mankiw, President George W. Bush’s economic adviser, argues in The New York Times that the United States should abolish the corporate tax and replace it with a tax on consumption. Even liberal pundits like Matthew Yglesias have toyed with the idea....This view, though fashionable, couldn’t be more misguided. We shouldn’t scrap the corporate tax — we should protect it." Reuven S. Avi-Yonah in Politico Magazine

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