Corporate Taxes: None or Flat Tax Recommendation

I have written quite a bit about unfair tax breaks and incentives such as TIFs that have benefited some businesses over other businesses, especially large businesses over small businesses. I stand by those ideas.

However, I have not said much about corporate taxes per se. On that subject I have mixed feelings. In general I don’t see any value in corporate taxes. And, if there are corporate taxes I think they should be flat taxes meaning every business should pay at the same rate. While I think use taxes, taxes for roads, water, infrastructure and the like should be paid by businesses and corporations as a part of the price of the product produced. But taxes such as school taxes and perhaps property taxes do not have to be part of the mix.

Business taxes are in general just pass along taxes. If you raise the tax, the business just passes that tax along to the buyer so in essence that type of tax is a regressive tax depending upon the product. Thus everyday products that everyone needs place a higher burden on folk with lower incomes as it takes a larger percentage of their income to pay these taxes. So food, shelter and clothing it seems to me should not be taxed or at least taxed at a flat rate. But when it comes to luxury items or homes of a very high value, sock it to them with progressive taxes. The people who pay those taxes can afford them. If they still made Hummers* I’d say tax them at a 90% rate and publish their pictures names, addresses and phones numbers as immoral over consumers. Well, that may be a bit rash.

Another example would be to pay no or little tax on a Timex watch but tax a Rolex at a very high rate.

Corporate taxes the way they exist now seem like political footballs. States play games with each other about trying to lure businesses away from each other with the usual result the regular state taxpayers pays a premium for this shopping. Or some municipalities and states see them a cash cows for their projects. Either way, the common good is not served.

Of course I realize the real corporate giants just cheat and hide their money’s and profits in foreign countries.

A post script thought. Why should any state or municipal money be used for sports stadiums? They way it works now is owners can get tax dollars to build a stadium, then turn around and sell that stadium and make out like bandits without contributing a thing. But that likely goes against the popular grain and folk who come out against public funding for public radio and TV would be for subsidizing programs that pay some players ridiculous salaries, others not enough and to view rather barbaric games that would be illegal if we forced people to play them. At least here in Wisconsin fans seem to happily tax themselves to go freeze and drink beer in a circle.

Now, I wonder whom else I can offend?

*Did you know there was a study done by the Journal of Consumer Research that says Hummer drivers believe they are defending America’s frontier lifestyle by owning and driving Hummers. Yep that trophy wife driving herself to the high-end grocery store is making a real case for patriotic American individualism. I rest my case.