Yeah, I’m interested in what all of you have to say about this. I’ll be blunt – I’m all for this. I feel that a genuinely entrepreneurial culture can help America greatly, even though I can conceive of other sorts of “regimes” that would be good but have different values.
The article for discussion is Jeffrey A. Miron’s “Economic Change We Can Believe In.” Highlights:
From the efficiency perspective, the corporate income tax has never been sensible policy. Economic theory holds that an efficient tax system should not tax capital income, since this distorts the incentives to save and invest. Even if the tax base includes capital income, corporate income taxation is overkill. All income earned by corporations accrues to households as dividends or capital gains, and this income is then taxed by the personal income tax system.
Not only is corporate taxation bad in theory, but if you’re worried about some people making too much money:
[The] desire to redistribute income can still be achieved using the personal tax system. That approach is better targeted than taxing corporate income, since many low and moderate income households own corporations via their pensions and 401(k)s. The true burden of corporation taxation falls not just on stockholders, but on employees through lower wages and on consumers through higher prices. Thus corporate taxation hits taxpayers across the income spectrum.
Corporate income taxation has other negatives. It requires a complicated set of rules and regulations, over and above the personal income tax system, generating compliance costs. Special interests ensure that corporate tax systems favor specific industries or activities, further distorting private investment decisions. Along those lines, corporation taxation reduces financial transparency, making it harder for investors to monitor corporate behavior.
I think that’s a good enough starting point for a discussion. If you have other articles you think should be considered, by all means, link away in the comments (although my spam filter will more than likely give you trouble, so give me a heads up if your comment gets caught).