What do you think would happen if corporate tax went away?
1. Corporations will lower their service costs
2. Pocket it all for Upper Mgmt bonuses
These are rather simplistic and naive economic options don't you think?
If the corporate tax went away several things
could happen:
1. Some companies would line the pockets of executives
2. Some companies would reduce the price of their products to gain a competitive edge over those who chose to do otherwise--thereby increasing profits and likely executive bonuses.
3. Invest in corporate infrastructure--which generates jobs
4. A little bit of all of these things.
Now you ask "But what about all the money our country needs from these taxes?"
We would likely lose none of it.
Executives that pay themselves bonuses = top tier personal income tax rates. We would collect roughly half of any of those dollars right back into the IRS.
Companies that lower their prices and sell more product would need to hire additional workers. Those workers must pay income taxes, so we'll collect a lot of it back right there. The same logic can be applied to companies that invest in infrastructure or operational expansion.
Additionally, all of those newly hired workers will now be spending money in the larger economy, money that will be turned into tax revenue in other areas.
In the end, eliminating the corporate tax may actually increase revenues as a whole for the government all while lowering consumer prices, boosting consumer confidence and creating jobs.
The corporate tax is idiotic. It's always been nothing but a feel-good populist trick. Corporations simply collect the taxes and pay them in, at the end of the day it's the consumer who actually foots the bill. Lawmakers simply understand that most consumers are too dumb to realize that.
