Douglas Labov

3 years ago
Overall, lowering the cost of business to shareholders and the corporations themselves is a prudent move to encourage investment, especially with the Federal Reserve likely to continue to raise interest rates in the near future. The proposal makes a strong case that the corporate income tax leads to significant, unwanted distortions in behavior. Therefore,it is better to at least encourage investment to grow the economy rather than drive away business to extract decreasing amounts of corporate revenue.


However, I agree with others here in that the U.S. is sacrificing too much potential revenue especially by not taxing foreigners, or even corporate profits themselves. This problem would further be exacerbated by the looming federal debt, with payments on its interest likely to rise significantly. Consequently, I feel the proposal should maintain its overall theme of low costs to corporations by out-competing other countries, but still extract some revenue through small taxes. Perhaps the proposal currently ends up on the "correct" side of the Laffer Curve? Even if it is wiser to not tax shareholders and corporations, a short term solution is still needed to collect some revenue that the government would now otherwise be forced to borrow.
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3 years ago
Overall, lowering the cost of business to shareholders and the corporations themselves is a prudent move to encourage investment, especially with the Federal Reserve likely to continue to raise interest rates in the near future. The proposal makes a strong case that the corporate income tax leads to significant, unwanted distortions in behavior. Therefore,it is better to at least encourage investment to grow the economy rather than drive away business to extract decreasing amounts of corporate revenue.


However, I agree with others here in that the U.S. is sacrificing too much potential revenue especially by not taxing foreigners, or even corporate profits themselves. This problem would further be exacerbated by the looming federal debt, with payments on its interest likely to rise significantly. Consequently, I feel the proposal should maintain its overall theme of low costs to corporations by out-competing other countries, but still extract some revenue through small taxes. Perhaps the proposal currently ends up on the "correct" side of the Laffer Curve? Even if it is wiser to not tax shareholders and corporations, a short term solution is still needed to collect some revenue that the government would now otherwise be forced to borrow.
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