Future Retirement Success
  • Politics
  • Business
  • Investing
  • Stocks
  • Politics
  • Business
  • Investing
  • Stocks

Future Retirement Success

Investing

The Right Corporate Tax Rate is 0 Percent

by October 25, 2024
October 25, 2024
The Right Corporate Tax Rate is 0 Percent

Jeffrey Miron

The 2017 Tax Cuts and Jobs Act reduced the tax rate on corporate income from 35% to 21%. Democratic presidential candidate Kamala Harris wants to raise the rate to 28%, arguing it would be “fairer” and help fund public services. In contrast, Republican candidate Donald Trump, who signed the 2017 Act, now advocates for a 15% corporate tax rate for US-based manufacturers, calling it “the centerpiece of his plan for a manufacturing renaissance.”

Both approaches are way off: the right corporate tax rate is 0%.

Beyond lowering the return to capital and thus reducing economic growth, taxing corporate income has three negatives.

First, taxing corporate income perpetuates the idea that something other than people can pay taxes. False. If you can’t shake hands with it, it doesn’t pay taxes. Corporations send checks to the IRS, but the economic burden of these payments falls on consumers (via higher prices), employees (via lower wages), and shareholders (via lower after-tax profits). Believing otherwise implies—incorrectly—that governments can fund their activities by making corporations pay their fair share, rather than by taxing people.

Second, taxing corporate income makes it harder for investors to understand corporate accounts, since corporations subject to taxation take actions that lower their taxable income even when not economically sensible.

Third, taxing corporate income leads governments to distinguish between for-profit (taxable) and non-profit (non-taxable) entities. This allows politicization of such designations and forces governments to make inherently controversial decisions about which activities and organizations are charitable, educational, religious, and so on.

The standard argument in favor of taxing corporate income—soaking the rich—is weak at best. Although existing evidence suggests that corporate taxation falls disproportionately on higher-income taxpayers, it harms lower-income taxpayers in many cases, including by lowering wages. A more targeted approach is progressive rates in the personal income tax system, possibly combined with a social safety net like universal basic income.

An ideal tax system distorts economic decisions as little as possible and avoids incentivizing evasion, avoidance, confusion, and politicization. A 0% corporate tax rate does just that.

This article appeared on Substack on October 25, 2024. Apex Poudel, a student at Motherland Secondary School in Pokhara, Nepal, assisted in the preparation of this post. 

0
FacebookTwitterGoogle +Pinterest
previous post
The US Is Not The Only Stock Market In The World
next post
Why the S&P 500 Won’t Break 6000 (Yet)

You may also like

Agree With It or Not, Colorado Supreme Court’s...

December 20, 2023

Reflections on the Libertarianism vs. Conservativism Debate

August 20, 2024

Clarifying the Possibility of a Contingent Election under...

October 20, 2024

Congress Takes One Step Closer to a TikTok...

March 8, 2024

North Carolina’s $1.2 Billion Bet on EV Startup...

April 23, 2024

Fact-Check: Taxes on the Rich

March 7, 2024

Trump’s Right, It’s Time to Repeal Worldwide Individual...

October 14, 2024

Presidents Must Take Accountability for the Officers They...

May 1, 2023

For Spending Cuts, How about the EDA?

June 20, 2023

Introduction to the New Cato Book Your Body,...

April 8, 2025

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free

    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Man Admits to Medicaid Fraud—That’s Not the Worst Part

      July 25, 2025
    • Yiwu: China’s Free-Market City

      July 25, 2025
    • Chart Mania – 23 ATR Move in QQQ – Metals Lead 2025 – XLV Oversold – XLU Breakout – ITB Moment of Truth

      July 25, 2025
    • SCOOP: Key GOP group starts work on 2nd ‘big, beautiful bill’ for Trump

      July 25, 2025
    • Grieving parents of American terror victim plead with top criminal prosecutor for justice

      July 25, 2025
    • What James Carville doesn’t get about voter priorities

      July 25, 2025

    Categories

    • Business (8,573)
    • Investing (2,147)
    • Politics (16,195)
    • Stocks (3,228)
    • About us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: futureretirementsuccess.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 futureretirementsuccess.com | All Rights Reserved