Monday, November 01, 2010

Why We Should Eliminate the Corporate Income Tax - Megan McArdle

Megan McArdle sets forth the arguments for why the corporate income tax should be eliminated. One of the best is the fictional idea that corporations actually pay the taxes. Ultimately, taxes are always borne by an individual somewhere:

You can't tax a corporation; you can only tax a person. For all the talk about corporate personhood, ultimately, all the income in a corporation ultimate ends up in the hands of some person: shareholders, employees, suppliers. Ultimately, we're not interested in the accumulation of money and power in "Ford Motor Company"; we're interested in the managers and shareholders who benefit from that accumulation.

This is a central concept of the FairTax also.

It's all good. Read the whole thing.

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1 comment:

Anonymous said...

Rich Karlgaard, in Forbes Magazine's 11/8/10 issue (pg 26) article "How to Make Atlas Shrug" wrote, "The more you tax and regulate things, the less you get of those things. What's really important to understand is that the "less you get part" is not linear. There's a tipping point at which you may get nothing if you pile on too many burdens. The supplier always has a choice to supply or not. Capital can go on strike. Atlas can shrug."