The Logic of a Corporate Tax

Every election cycle seems to bring out the age-old argument about corporate tax rates. Ideologically, the left plays to its base and pushes higher corporate tax rates as a means to raise tax revenues from those who can afford it to help those who cannot, while the right plays to its base and pushes for lower corporate tax rates as a means to make American companies more competitive and create more jobs. When we look below the surface of these contrasting positions, however, we see a basic truth: it is easy to emote to an ideology, but it is often quite another to live out its reality. Some might call this the law of unintended consequences.A corporation is a fictitious person under the law. Its function is to make a profit for its shareholders, whether a privately held or publically held company. Profits, simply put, are the difference between revenues coming in and expenses going out, with the higher the revenues and the lower the expenses, the better the profits. Expenses...(Read Full Post)