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Eliminate Corporate Income Taxes?

Posted by on Apr. 25, 2012 at 11:47 AM
  • 27 Replies

I'm curious as to other people's opinions about the elimination of Corporate Income Taxes.

Right now the US has the highest corporate income tax rate in the world at 35%.  But many if not most corporations do not actually have to pay this rate because of loopholes in the system created by politicians who reward their most generous supporters.

I don't even understand why corporations are taxed at all.  Buildings and paper entities cannot themselves incure income, only people can.  So why not eliminate corporate taxes in favor of all profits being taxed as personal income.

Eliminating the corporate income tax would also eliminate all the tax loopholes that go along with it.  Right now, large corporations are at a huge advantage over smaller companies because they have the means of taking advantage of tax loopholes that smaller companies cannot.

Without these loopholes and tax shelters such as leveraging capital against debt, companies would be forced to use profits by either reinvesting in the company, or distributing those profits as income.  The income would then be taxed at the personal income tax rate. 

Eliminating the corporate income tax would automatically lower the cost of doing business, which would lead to the reduction of prices to consumers.

What are your thoughts?

by on Apr. 25, 2012 at 11:47 AM
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Replies (1-10):
rachelrothchild
by on Apr. 25, 2012 at 11:50 AM

Corporations are the only entities that SHOULD pay taxes (at least, that was the original intention).  Interesting concept, but I think the best thing is to get rid of personal income tax first and then address that later.

JakeandEmmasMom
by Gold Member on Apr. 25, 2012 at 11:53 AM

 Hmmm...Well, considering that the SCOTUS has ruled in favor of corporate personhood, maybe the corporation, as an entity, should pay income tax as if it were a person.  Very interesting idea.

Mamawto4
by Bronze Member on Apr. 25, 2012 at 11:59 AM


Quoting rachelrothchild:

Corporations are the only entities that SHOULD pay taxes (at least, that was the original intention).  Interesting concept, but I think the best thing is to get rid of personal income tax first and then address that later.

Corporations only bring in about 8%-10% of revenues to the government, while personal income taxes bring in approximately 85%.

And, I've read that with each 1% of additional tax to a corporation there is a corresponding 1% reduction in wages and benefits to employees in that corporation.

rachelrothchild
by on Apr. 25, 2012 at 12:02 PM

I'm for abolishing the IRS and drastically reducing the size of government, so you are barking up the wrong tree with that.  In that case, we wouldn't need all that revenue.

Quoting Mamawto4:


Quoting rachelrothchild:

Corporations are the only entities that SHOULD pay taxes (at least, that was the original intention).  Interesting concept, but I think the best thing is to get rid of personal income tax first and then address that later.

Corporations only bring in about 8%-10% of revenues to the government, while personal income taxes bring in approximately 85%.

And, I've read that with each 1% of additional tax to a corporation there is a corresponding 1% reduction in wages and benefits to employees in that corporation.


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rachelrothchild
by on Apr. 25, 2012 at 12:03 PM

That never should have happened.

Quoting JakeandEmmasMom:

 Hmmm...Well, considering that the SCOTUS has ruled in favor of corporate personhood, maybe the corporation, as an entity, should pay income tax as if it were a person.  Very interesting idea.


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Mamawto4
by Bronze Member on Apr. 25, 2012 at 12:06 PM


Quoting JakeandEmmasMom:

 Hmmm...Well, considering that the SCOTUS has ruled in favor of corporate personhood, maybe the corporation, as an entity, should pay income tax as if it were a person.  Very interesting idea.

This would be fixed by the elimination of the corporate income tax.  What would be the point of corporations using profits to sway politicians if there was nothing to sway?  Right now the sway is for the special tax incentives.  That would be completely eliminated if the taxes were completely eliminated to begin with.

Mamawto4
by Bronze Member on Apr. 25, 2012 at 12:10 PM

I don't think I'm totally understanding your point of view.  1/2 of the IRS is used for business taxes, so with the elimination of the business tax 1/2 of the IRS would also be eliminated.

What do you mean by "we wouldn't need all that revenue"?

Quoting rachelrothchild:

I'm for abolishing the IRS and drastically reducing the size of government, so you are barking up the wrong tree with that.  In that case, we wouldn't need all that revenue.

Quoting Mamawto4:


Quoting rachelrothchild:

Corporations are the only entities that SHOULD pay taxes (at least, that was the original intention).  Interesting concept, but I think the best thing is to get rid of personal income tax first and then address that later.

Corporations only bring in about 8%-10% of revenues to the government, while personal income taxes bring in approximately 85%.

And, I've read that with each 1% of additional tax to a corporation there is a corresponding 1% reduction in wages and benefits to employees in that corporation.



erika9009
by Silver Member on Apr. 25, 2012 at 1:27 PM

The issue here is that corp income taxes are factored into the price YOU and I pay.  The customers eventually pays these taxes in the price of the product.

I think getting rid of personal income tax would be interesting, but you'd have to have a national value added tax.

Quoting rachelrothchild:

Corporations are the only entities that SHOULD pay taxes (at least, that was the original intention).  Interesting concept, but I think the best thing is to get rid of personal income tax first and then address that later.


____________________________________________________

Erika..

Children are a blessing and are never inconvenient.............

rachelrothchild
by on Apr. 25, 2012 at 3:51 PM

If the federal government was much smaller, we wouldn't need all the revenue.  If you eliminate corporate tax and government remains the same size, you are going to have to tax the crap out of individuals.  Am I understanding what you are saying?

Quoting Mamawto4:

I don't think I'm totally understanding your point of view.  1/2 of the IRS is used for business taxes, so with the elimination of the business tax 1/2 of the IRS would also be eliminated.

What do you mean by "we wouldn't need all that revenue"?

Quoting rachelrothchild:

I'm for abolishing the IRS and drastically reducing the size of government, so you are barking up the wrong tree with that.  In that case, we wouldn't need all that revenue.

Quoting Mamawto4:


Quoting rachelrothchild:

Corporations are the only entities that SHOULD pay taxes (at least, that was the original intention).  Interesting concept, but I think the best thing is to get rid of personal income tax first and then address that later.

Corporations only bring in about 8%-10% of revenues to the government, while personal income taxes bring in approximately 85%.

And, I've read that with each 1% of additional tax to a corporation there is a corresponding 1% reduction in wages and benefits to employees in that corporation.




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Della529
by on Apr. 25, 2012 at 4:38 PM

 

Quoting Mamawto4:


Quoting JakeandEmmasMom:

 Hmmm...Well, considering that the SCOTUS has ruled in favor of corporate personhood, maybe the corporation, as an entity, should pay income tax as if it were a person.  Very interesting idea.

This would be fixed by the elimination of the corporate income tax.  What would be the point of corporations using profits to sway politicians if there was nothing to sway?  Right now the sway is for the special tax incentives.  That would be completely eliminated if the taxes were completely eliminated to begin with.

 How would eliminating CIT's stop them from lobbying politicians?  Politicians are swayed in more areas than just IT's.  How would it stop defense contractors who want government contracts?  Or text book companies who lobby for their products in public schools?

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