We should eliminate the corporate income tax because it’s ineffective.
According to this article, 20% of corporations don’t even pay a dime. But they had profits…
And there’s plenty more that get loopholes thanks to lobbyists to cut their rate from 35% to an effective rate of about 15%.
Lobbying hurts American citizens for corporate gain. We need to end it. The only way to stop the madness is to eliminate the corporate tax code.
The corporate income tax only accounts for 11% of tax revenue.
We could get that by simply adding a 3% tax on revenues for public companies.
Adding a 3% tax on revenue of the Fortune 500 corporations would generate $360 Billion in tax revenue. Problem solved.
How much do corporations spend on tax compliance? Way too much. And they pass those costs onto consumers already. (This source says the hidden cost for American citizens is about $1 TRILLION per year)
So, by alleviating them the trouble of tax compliance by giving them a calculator (revenue multiplied by .13 equals tax owed), we save them billions of dollars and millions of hours of labor. Those savings will go to pay the new tax, so it all comes out a wash for consumers.
Taxing revenue means there’s no need to hide profit in offshore accounts. It incentivizes corporations to keep their money here. Or at least removes the incentive to offshore it.
More money staying in the US means more investments in new businesses here. And it removes the incentive to have a loss for tax benefits.
Don’t have a loss! The objective of a business is to be profitable. Be profitable! Figure it out. If you can’t, your business deserves to die.
In summary: a flat (no loopholes) 13% tax on revenue of publicly traded companies would replace the revenue from both the individual income tax and the corporate income tax while removing incentives for businesses to hide profits and offshore assets.
We could cut the IRS staff and budget in half as compliance would be a LOT easier. That’ll save some money (about $6 Billion) in getting towards a balanced budget (oh yeah, my series of plans ends with a balanced budget. You’re welcome America!).
The payroll tax will be decreasing as giant corporations replace many workers with robots and automation systems.
We’re going to need more tax revenue from somewhere. And I think I’ve got an idea or two… Tune in for the next one.