Thursday, December 12, 2002
Corporate Income Tax: Could we really abolish it? This chart shows that federal revenue from corporate income taxes has remained fairly steady over the years, staying typically under $150 billion. I haven’t run any numbers, but let’s say $150 billion is a ballpark average. Stephen Moore of Cato, testifying before John Kasich’s budget committee in 1999, estimated $75 billion in corporate subsidies in 1997, or roughly half of corporate income tax revenues. Already we’re in the realm of poor bargains. In 2001, Cato estimated that the figure was closer to $85 billion. So now we also know that, while corporate tax revenue is relatively stable, corporate welfare is growing. Further, this doesn’t take into account the market cost to consumers. Some of the corporate welfare programs cost us twice: once in taxes, again in higher prices. Moore estimates that restrictions on trade alone cost Americans another $80 billion dollars in consumer costs. I'm an amateur with a few minutes to spare. Imagine what a real wonk could prove. Let's kill the tax: we'll all pay less in taxes, and we'll kill the fiction that corporations pay taxes anyway, since that is just another "cost" passed on to consumers in higher prices.