NYT Editiorial: No Replacement for Corporate Taxes [View all]

[Scuba]

The corporate "don't tax us" arguments dismanteled, one by one ...


http://www.nytimes.com/2013/05/31/opinion/no-replacement-for-corporate-taxes.html?_r=0

In response to the recent Senate hearing on tax avoidance at Apple, some pundits have argued that the best solution is to abolish the corporate income tax altogether. Their contention is that multinational corporations — which hold trillions of dollars in mostly untaxed profits offshore — are so complex and so expert at avoidance that even trying to tax them is pointless. It would be better, they say, to quit trying and to raise needed tax revenue in other ways. This would be a completely wrong approach.

Eliminating the corporate tax would not fix the broken tax system. The corporate share of the overall tax burden has declined as the labor force’s share has increased. At the same time, the nation has gone deeper into debt to provide the social and economic foundation on which corporate success is built — including security, education, infrastructure, scientific research, health care, environmental protection and legal, financial and regulatory systems.

Ending the corporate tax would only make that bad situation worse. Abolishing the corporate income tax would be a huge tax cut for the wealthy, which would ultimately result in even heavier burdens on everyone else or a government that is far too small to meet the nation’s needs. The corporate income tax — which is projected to raise $4.8 trillion in the next 10 years even with all the avoidance that is going on — falls most heavily on corporate shareholders, who tend to be wealthy.

Claims by business executives and anti-tax crusaders that corporate taxes mostly hurt workers because they cause companies to reduce wages and raise prices are overstated. According to the nonpartisan Tax Policy Center, more than half the burden of the corporate tax falls on the top 1 percent of tax filers, with the top 20 percent bearing nearly 80 percent of the burden.