Thursday, March 1, 2012

Look Who Opposes Corporate Tax Reform

Just remember, as Mitt Romney said, "Corporations are people". I'd assume the converse to be true and that every natural person should have their own corporate charter.
From Capital Gains and Games:
Corporate tax reform as it's most often discussed these days sounds great in theory: Lower the overall tax rate and offset the budget impact by eliminating various special provisions.
Who isn't in favor of that?
As Greg Ip in the latest issue of The Economist notes, the answer is lots of people.
Not surprisingly but largely overlooked in the reports on the plan announced by the White House several weeks ago, the biggest opponents (other than House and Senate Republicans, that is) to any substantial corporate tax overhall come from the corporate world itself: They are the companies, industries, and sectors that currently benefit from the current system at the expense of the corporations, businesses, industries, and sectors that don't get the same special treatment.
And that's just the beginning.
The best way to understand why, regardless of who is president and which party controls Congress, the politics of corporate tax reform will make it much harder to enact any proposal than would seem likely at first glance is to consider the most extreme proposal possible: Rather than just tinker with the corporate tax code by "reforming" it, why not just do away with the whole thing.
Seems easy to love, right? There would be no annual tax return preparation costs; no corporate tax department and, therefore, lower administrative costs; and, of course, no tax payments.
In other words, the world would be a much better place for those who pay corporate income taxes. The only problem: This would be a disaster for many large and extremely influential parts of the corporate tax world.
First, those companies and industries that already pay little or no federal taxes would see no benefit at all if the corporate income tax were to go away. After all, the system that's currently in place means that they pay nothing now and have an advantage compared to their competitors who do.
In fact, the current corporate tax system is a boon for some companies because they have a negative tax rate and get payments from the government through it....MORE
I'd suggest something looking like the charter granted to "the Governor and Company of Adventurers of England trading into Hudson Bay":
That's Charles II, the Merrie Monarch, in the upper left.