In critiquing President Obama’s corporate tax proposals, Barron’s editorial page editor Thomas G. Donlan offers (subscriber link) a recommendation that should be familiar to Locker Room readers.
Lower rates, while a step in the right direction, are insufficient. Closing “loopholes” is also a step in the right direction, but also insufficient. We should not be satisfied with any such corporate-tax reform.
The only sensible corporate income-tax rate is zero. Only abolition of the corporate income tax can:
- Lift hundreds of billions of dollars of burden from profitable companies, so they can pass more money to their investors, employees and customers;
- Make more citizens see their real burden of tax, their vision clarified by ending the big illusion that corporations pay tax rather than pass their taxes on to those investors, employees and customers;
- Cripple the ability of politicians to steer capital to their favorite industries, businesses and communities;
- Force a half a million or more smart lawyers and accountants into endeavors more productive than engineering tax dodges;
- Eliminate the tax-driven preference for debt financing that helps drive the pursuit of dangerous leverage.
Roy Cordato offered similar arguments when he recommended last November that North Carolina scrap its corporate income tax.
