Should we get rid of corporation tax (part 2)

I would have preferred there be some reference to business ethics in the article because taxing corporations has moral implications. Nevertheless, my good readers are certainly capable of reading between the lines and getting the implications here. James Pilant

Inequalities

In the last post I talked about why so many people endorse the idea of completely scrapping corporation tax.  To briefly reiterate the main arguments:

  1. We don’t know who mostly bears the costs of corporation tax. So if what we really want to do is tax the rich beneficiaries of corporate profits, then we’d be better off raising capital gains and dividend taxes (or even the personal income tax at the high end).
  2. Corporation tax doesn’t work very well to discourage negative externalities like carbon emissions – a specific carbon tax would do this more effectively.

As I said last time, it seems to be economic gospel, even on the left, that the corporation tax is a ‘bad’ tax.

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