Corporate Income Taxes
By I really don’t think Lawrence Kotlikoff’s idea to abolish all corporate income taxes is very good.
In recent decades, American workers have suffered one body blow after another: the decline in manufacturing, foreign competition, outsourcing, the Great Recession and smart machines that replace people everywhere you look. Amazon and Google are in a horse race to see how many humans they can put out of work with self-guided delivery drones and driverless cars. You wonder who will be left with incomes to buy what these robots deliver.
What can workers do to mitigate their plight? One useful step would be to lobby to eliminate the corporate income tax.
That might sound like a giveaway to the rich. It’s not. The rich, including Boeing’s stockholders, can take their companies and run — and not just from Washington State to, say, North Carolina. To avoid our federal corporate tax, they can, and often do, move their operations and jobs abroad. Apple’s tax return says it all: The company, according to one calculation, paid only 8.2 percent of its worldwide profits in United States corporate income taxes, thanks to piling up most of its profits and locating far too many of its operations overseas.
While Kotlikoff makes the not unreasonable suggestion that corporate taxes be replaced by taxes on dividends, the reality is that policy makers are going to take this, slash the corporate taxes, and not tax dividends or income. And while he might not be wrong that corporate taxes are an incentive to corporations moving around the world to maximize profit, they are doing that anyway to avoid labor standards, environmental regulations, and every social responsibility in exchange for an awesome next quarterly report.