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Sunday, February 17. 2008

Eliminate corporate taxes

Some points that Larry Kudlow made on the radio yesterday (paraphrased):

Corporate taxes should be zero in the US, as should the capital gains tax, dividend taxes and estate taxes (they are all forms of double-taxation). The rest of the fast-growing world (except for dying Euroland) is coming to understand that, but our Dems are still stuck in the 1930s with their anti-business, anti-free market populism.

After all, who ends up paying those taxes on corporate income? Consumers in the US and around the world (30% of American business does exports), and investors (which now includes most Americans). Without the investors, there would be no business growth and no job growth. Kudlow reminds us that 138 million Americans work for corporations, and it is very much in their interest that those businesses do well in the world economy.

The Dem government-greed-based attacks on, and plans to control, our wonderful, high-wage industries (oil, pharmaceuticals, finance, insurance, etc.) are from another era, and promise nothing but damage to employees and shareholders.

Posted by The Barrister in Our Essays, Politics at 12:12 | Comments (11) | Trackbacks (0)

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I'm generally amenable to this kind of argument, but if both the corporate taxes plus cap-gains/dividend taxes are removed, doesn't that go from double taxation to non-taxation? Granted, there's still plenty of taxation that occurs on the salaries of a company, but the profits that someone makes from investing (which, unlike us salary-schlubs, is the principal income of the upper class) would then be essentially tax free, yes?

I'd favor removal of all corporate taxes and treating investment taxation as regular income: that would put us onto the same system and make the wealthy just as interested in the flat tax as we middle-class folks are.

(The estate tax, just like taxation of gifts within families, is an abomination and should be disposed of will every possible prejudice.)
#1 JimDesu (Link) on 2008-02-17 12:52 (Reply)
The taxation on businesses comes via tax on salaries. I guess, if you eliminated corp taxes, you would have to keep some tax on dividends and cap gains. Because God forbid that any $ go untaxed!
#1.1 The B on 2008-02-17 12:56 (Reply)
Well, I'd certainly prefer less tax to more: I just believe that homogenizing the system will help for there to be less of it.
#1.1.1 JimDesu (Link) on 2008-02-17 13:30 (Reply)
You miss the point on double taxation. Larry is saying income should be taxed once. Your income is taxed and you make investments with after tax income, which should not be taxed again. If I understand Larry, only active income is taxed.

Lower tax rates would increase savings, capital formation and investment, jobs and income - that would lead to greater tax revenues.

The current tax code is broken and a source of political corruption.

Take a look at the waste of time and money in Caroline Baum's article on Bloomberg.

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aHxJtBgXU14A

Here are a couple of key highlights.

(1) Form 1040 instructions total 143 pages which is times more pages than 1985 before tax simplification in 1986.

(2) If your taxes are more complicated, the IRS has 195 additional forms with more than 1,000 pages of instructions.

(3) Americans will spend about $325 billion in federal tax compliance costs this year.

(4) The IRS estimates that households and businesses spent a combined 6.6 billion hours last year filling out tax forms.

The proposed federal budget is $3.1 trillion. We have a spending problem and not a revenue problem. (I could go on.)

Is it time for another Boston Tea Party?
#1.1.2 Barrett on 2008-02-17 16:06 (Reply)
That's a very good point! I now completely concur.
#1.1.2.1 JimDesu (Link) on 2008-02-17 23:44 (Reply)
There was some excuse for Democrats believing that the market was more dangerous than useful in the 1930's. We have more data now.

There is this odd idea that if they aren't tinkering with things right this minute, that all those Other People in the country are going to start doing vile things the moment their back is turned. I believe that much of a progressive's desire to regulate is not based on information, but his personal desire to intervene.

Taxes? Most people would pay more to be left alone than they would pay for others to go around adjusting the picture frames in their house.
#2 Assistant Village Idiot (Link) on 2008-02-17 13:13 (Reply)
Anybody interested in this topic ought to make time or Tivo for Kudlow's 6:00 CST CNBC show. It's not dry financial droning about which stocks to trade -- he has top-echelon guests from both sides of these issues, and they go at it with entertaining and highly elucidating vigor. Try it and you will see.
#3 buddy larsen on 2008-02-17 18:45 (Reply)
Buddy,

I agree, although I am never around to see it and it's always too late for me to watch the "instant replay".

I challenge everyone with an open mind (i.e. a mind that draws conclusions from the facts versus fitting the facts into a predisposed view) to study economics and capitalism. Milton Friedman and Friedrich Hayek are good places to start.

Here is a broader list.

http://www.policyofliberty.net/economists.html

Nothing is perfect, but more good comes to more people this way. And they have the freedom to choose.
#3.1 Barrett on 2008-02-17 19:55 (Reply)
amen -- plus, there is no substitute for the pride of accomplishment. There's no other feeling like it, you probably can't be happy without it, and there's only one way to get it -- to accomplish. Very much more difficult a proposition under socialism, is the verdict of history. But somehow the verdict of history doesn't reach some people's little pea brains.
#3.1.1 buddy larsen on 2008-02-17 21:10 (Reply)
You are so right. The things we really value are the things we have earned. That is why hard work is so important.

If everyone practiced this alone to the best on one's ability, the world would change dramatically.

America is one of those special places where a person with the right idea at the right time can go from obscurity to riches and gain the respect of many. Not so under socialism, where your class is a key determinant.

It would be nice if our schools actually taught this along with reading, writing, arithmetic and science.
#3.1.1.1 Barrett on 2008-02-18 23:22 (Reply)
Long ago somebody had a definition of a louse : somebody who steals your $500 stereo and sells it for $20.

Which is what government does.
#4 Ron Hardin (Link) on 2008-02-18 06:13 (Reply)

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