After President Obama’s speech on personal Income Taxes, RATE co-chair James P. Pinkerton explains why corporate Tax Reform needs to be part of the debate and how Democrats and Republicans both support a lower rate and broader tax base.
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Corporations are not monoliths — they are made up of individuals, including workers and non-wealthy shareholders. So are corporations distinct from the people that comprise them? When corporations are taxed, who pays the tax? Economics professor Steven Horwitz shows why a tax on corporations is not the equivalent of a tax on the wealthy. Instead, workers and consumers will pay these taxes. A tax on a corporation is also a tax on the workers who work at the corporation, the consumers who buy from the corporation, and the shareholders who own the corporation as part of their retirement fund.
President Barack Obama wants to drop the Corporate Tax rate from 35% to 28% and move manufacturing to a special category, with a 25% rate. Reuters columnist David Cay Johnston warns this could cause a rush of “manufacturers” looking to take advantage of the lower rate.
John Gregg, the Democratic candidate for governor, proposed big cuts in Corporate Taxes Wednesday. It’s the second element in a tax plan that includes Gregg’s proposal to eliminate the sales tax on gasoline.
Large corporations are privy to tax laws that most small-business owners are not, and the U.S. is at a crucial fiscal juncture where things need to change. David Cay Johnston breaks down Corporate Tax policy in this edition of Decoder.