Kill the Corporate Income Tax

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Megan McArdle thinks we should do away with the corporate income tax. I agree! Here is her most persuasive argument:

Without the corporate income tax, a lot of the incentive for lobbying would go away.  Not all of it, by any means — I am not trying to paint some halcyon future here. But an enormous amount of effort goes into lobbying for tax laws, and politicians often reward favored constituent businesses with little sweetheart fillips to the tax code. Conversely, apparently neutral changes to the tax code often turn out to be excellent ways to hamstring your competition, particularly small businesses who cannot afford a huge tax department.

And just think of all the corporate tax attorneys who’d be out of jobs.1 It’s a win-win!

Seriously, though: I agree. The corporate tax code is by far the most popular way for politicians to reward favored interests without making those rewards too obvious. As long as it exists, even if the tax rate is low, it’s a way to funnel money to one sector over another or one company over another. Just get rid of it.

The big question, though, is what to replace it with. Higher capital gains and dividend taxes are an obvious possibility. Higher top marginal income tax rates. A carbon tax. A financial transaction tax. There are lots of alternatives.

Of course, the business community would never support this. For starters, they like all the tax goodies they get, and they like the potential of getting more. And of course, businesses are run by rich people, and rich people would frankly prefer that taxes be high on their corporations than high on themselves. On a more substantive level, it would seriously raise the incentives for income shifting scams, so we’d have to amp up tax audits to catch that. So it’ll never happen. But it’s a nice idea.

1They wouldn’t be entirely out of work, of course. There would still be state corporation taxes to worry about, and multinationals would have international tax issues. But it would sure cut down their ranks.

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SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

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