Just abolish the corporate tax.

Reader comment on: Corporate Tax Bidding War

Submitted by Lyle (United States), Jun 11, 2011 23:16

If you abolish the corporate tax a lot of effort for companies would be eliminated and a number of lawyers and accountants would be surplused. I would then tax capital gains and dividends at regular rates. Some see that someone other than the shareholders and the customers of a company benefit from its efforts (other than employees who presumably provide effort on behalf of what they are paid). If a company has profit, it can do basically 3 things with it. 1 pay a dividend, 2 buy its stock back, or 3 invest it. 1 and 2 benefit the shareholder directly. 3 benefits the shareholder because the company (assuming it invests wisely) is worth more because of the investment. Some see some evil goblin that absorbs the profit but I can't find this being.

Now because before the current crisis everyone talked about a vat and because a vat harmonizes our tax situation with other countries, replace the corp tax with a vat. This does discourage imports because the vat is paid on import and encourages exports because the vat is rebated on exports. Let's face it in the end only people pay taxes (all be it today thru groupings of people).

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