9 votes

Why should corporations be taxed?

I saw someone else post on another thread about replacing all taxes with corporate taxes.

What, first of all, is a corporation? It's an organization of many people working to achieve a common goal, and this corporation can behave legally as if it were a single person with a single goal. A corporation is teamwork.

So imagine, if there were no personal taxes, and only corporate taxes. Wouldn't that be a direct penalty on teamwork? Would the world be a better place if capital couldn't organize as easily?

Would cars be cheaper, or more expensive? Would gas be cheaper, or more expensive?

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IF you absolutely have to

IF you absolutely have to have some taxes, I would prefer all taxes be consumer taxes for non-essential luxuries. At least you would be able to have a choice between saving money tax free, and buying a luxury.

Taxes

Fair tax and flat tax are both unconstitutional. The income tax is an indirect excise on the gains from exercising a federal privilege. (a source) Once you know this, and what to do about it,you will have learned to stop worrying and love the FEDERAL INCOME tax. (as opposed to the federal INCOME TAX.)

FEDERAL INCOME - do you have any?
We should stop trying to save everyone from their own ignorance and the price they pay, and learn how to INDIVIDUALLY get the IRS off of your back.
No silver bullet - The answer lies in solid legal research and the application of law to your circumstances. Knowledge is power.

WWW.LOSTHORIZONS.COM

“...taxes are not raised to carry on wars, but that wars are raised to carry on taxes”
Thomas Paine, Rights of Man

If you really look at it, it

If you really look at it, it can be sickening.

Look at some of the major corporations. The US government protects their wealth and property. They use the US system to protect their ideas. Government policies that boost the stock market directly help them. US military action stimulates the economy and their pocket-books. Many of them literally do a lot of profitable business with the government.

Yet many of these companies have a negative tax rate. We're paying them and providing all these services to them!

Plan for eliminating the national debt in 10-20 years:

Overview: http://rolexian.wordpress.com/2010/09/12/my-plan-for-reducin...

Specific cuts; defense spending: http://rolexian.wordpress.com/2011/01/03/more-detailed-look-a

It's just a feel good move

As we all know corporations are people and thus people should be taxed. Nothing to see here.

Corporations are not natural

They can only exist because they are chartered by governments and given special privileges and immunities that natural persons don't have. If we want to continue to allow this, then I think it is totally legitimate to expect corporations to pay for their special privileges via taxation.

Replace individual income taxes with corporate taxes. Then if you want to form a company and avoid the corporate tax, you would organize as a partnership and actually insure the company against liability in the free market instead of hiding the limited liability protection granted by the government.

A corporation is...

a government license of special rights, privileges, and immunities granted for a fee.

As such, it is illegitimate from the perspective of natural law.

But, to pragmatically answer your question, it is because of the special tax treatment. If you are an ordinary corporation, you can be taxed at a rate lower than the top marginal rate for an individual. If you are a sophisticated multinational corporation, you can be taxed at ridiculously low rates. Over time, this provides a powerful compounding effect whereby you can outstrip ordinary individuals vis a vis retained earnings (especially in an inflationary fiat money economy).

So, that is the pragmatic reason that corporations "should be taxed."

Of course, a far simpler and more equitable solution is to simply treat all corporations as Sub-S corporations for tax purposes, and tax their income at the individual level (whether "retained" or not).

Of course, since all coercive taxes are illegitimate under natural law, perhaps they shouldn't be taxed. But that duck only quacks if no one else is taxed either.

trust vs. corporation

What you have described is a trust not a corporation. The taxation on a trust should depend on whether the activity of a trust is commercial or not.

A corporation is a privilege granted by government. People who are outside the jurisdiction of government (those who have no agreement to be subject to the domestic laws of nation, like anti-fraud or anti-slavery laws) are restricted by law on how they participate with the domestic society. It is the role of government to determine how safe and equitable it is to allow aliens to participate in a domestic economy.

Some Citizens might seek the limitation of liability (which is not available under natural law) and the added oversight of corporate activity by government as a feature. A corporation is essentially a group of people pretending to be aliens on ship just offshore, making decisions beyond the reach of law. This is a privilege and a service offered by government, so of course they can take their cut (excise tax).

Cyril's picture

Well, nobody and nothing should be taxed.

Well, nobody and nothing should be taxed.

But if we are to keep a - tiny, as tiny as possible - government, a republic to last this time, hopefully, my personal daydream as of today (re: funding whatever public services that'd remain around) is : user fees.

You use the public sector? You pay.

You don't use the public sector? You don't pay.

What I fail to see is which public sector other than Justice (maybe, not even sure about this one exception) could not find a replacement on the free-markets, hence my belief that if we don't have a tiny, tiny government, it's simply because people (still) don't want it.

True, true, though : the appeal of lip service for "free" stuff and its mermaids is - much regrettably - still too strong, observably, including in 2014, despite some early clues...

http://en.wikipedia.org/wiki/Bread_and_circuses#Rome

How sad :/

"Cyril" pronounced "see real". I code stuff.

http://Laissez-Faire.Me/Liberty

"To study and not think is a waste. To think and not study is dangerous." -- Confucius

How many who are commenting

How many who are commenting here own their own business or are business partners? I know Mike Nystrom falls into the business owner category, as do I.

It's easy to cast aspersions when one has no personal experience, but there are a lot of uninformed comments here.

ChristianAnarchist's picture

We have two "corporations".

We have two "corporations". My wife is a Doctor and I run our clinic. That said, I would rather live in an environment where we did not have to deal with legal fictions. I would like to just do business as "we humans" and let the chips fall where they may but unless we can reform the lawsuit happy culture people like us need some form of protection from frivolous lawsuits (even though after 10 years in practice we have not had ANY lawsuits or even threat of lawsuit...).

Beware the cult of "government"...

.

.

George, a corporation like the one you are referring to

is an entity chartered by a government and granted limited liability protections (and other privileges) from that government. And it is mandated to seek profit above all else (to protect its share holders) And what the legislature creates, it can tax and destroy.

Think about it, can you incorporate your company all by yourself? I'm a corporation now-TADA! Can you grant yourself limited liability protection? You can't sue me now-TADA!

Contrast this with a living soul which can trade as a matter of natural right and is fully responsible for any harm caused.

Basic civics.

Portions of what you are

Portions of what you are claiming as fact is nonsense.

You know, my first thought

You know, my first thought was to agree with you because of the style and tone of what was written, but he is actually correct.

Ventura 2012

I guess I've got to work on my tone...

funny, in my head I have a cordial and jovial tone.

you're not the first to make such a comment.
I wonder how i'll address it. Thanks for the support though.

Its not a hateful tone or

Its not a hateful tone or anything, its just written in a stream of consciousness conspiracy tone.

Ventura 2012

care to elaborate...

I would like to learn/fill in the gaps/rid myself of misinformation.

so please explain.
-------------------------
https://supreme.justia.com/cases/federal/us/201/43/case.html

Some good reading from SCOTUS on the subject: Hale v Henkel
...we are of the opinion that there is a clear distinction in this particular between an individual and a corporation...The individual may stand upon his constitutional rights as a citizen. He is entitled to carry on his private business in his own way. His power to contract is unlimited. He owes no duty to the State or to his neighbors to divulge his business, or to open his doors to an investigation, so far as it may tend to criminate him. He owes no such duty to the State, since he receives nothing therefrom beyond the protection of his life and property. His rights are such as existed by the law of the land long antecedent to the organization of the State, and can only be taken from him by due process of law, and in accordance with the Constitution. Among his rights are a refusal to incriminate himself and the immunity of himself and his property from arrest or seizure except under a warrant of the law. He owes nothing to the public so long as he does not trespass upon their rights.
Upon the other hand, the corporation is a creature of the State. It is presumed to be incorporated for the benefit of the public. It receives certain special privileges and franchises, and holds them subject to the laws of the State and the limitations of its charter. Its powers are limited by law. It can make no contract not authorized by its charter.

For one:

http://www.ehow.com/about_7319275_can-person-incorporate-him...

For two:

You'll have a hard time proving you have a soul in court. ;)

so your number one proved my point

an individual must use a governing authority to form a corporation. He can't do it all by himself.

"A corporation is formed under the laws of a state where the corporation plans to conduct business. Each state has its own corporation laws that determine the procedures to follow to properly organize a corporation under the state's jurisdiction."

This short article does not go into the implications of this one paragraph, but it's enough to point out that without the laws of the state, you cannot have a limited liability corporation. It is the laws of the state that create the fictitious entity and limited liability status. (among other privileges).

and you are correct about number 2. Notice I didn't say a living soul has a legal right to trade, i said it has a natural right to trade...rarely do governments acknowledge/respect natural rights.

Should governments be in debt.

If governments crowd-sourced, there would be no more debt and less waste.

Free includes debt-free!

Corporations should not exist

Corporations are a legal fiction created by governments to get more money. Governments give legal protection to the owners of corporations in exchange for 30 percent of profits. The corporation passes the tax cost along to the customer and the owners/operators of the corporation enjoy immunity from liability from any harm the corporation might cause. If a corporation violates regulations or does harm, government fines corp., corp. passes cost along to customer. No actual people get jailed or fined (Think Banks). Corporations are just another example of how governments harm people.

Corporations don't pay taxes,

Corporations don't pay taxes, their customers do.

Here is a Team Analogy

for ya. How about soccer teams competing in the World Cup having limited liability for losses which prevents elimination from the tourney?

Michael Nystrom's picture

lol

good one.

To be mean is never excusable, but there is some merit in knowing that one is; the most irreparable of vices is to do evil out of stupidity. - C.B.
Michael Nystrom's picture

Corporations claim to be people

Whether you agree with it or not, people get taxed in our world.

Corporations seem to want it both ways. They want to have the benefits of being "people" but not the costs, and not the responsibilities, and not the taxes.

To be mean is never excusable, but there is some merit in knowing that one is; the most irreparable of vices is to do evil out of stupidity. - C.B.
ChristianAnarchist's picture

If you believe in

If you believe in "government" (I don't) it would be logical to believe that the only LEGITIMATE subject of taxation would be for a service rendered. There is no greater service than to "create" you and incorporation is just that - the creation of the entity. That entity owes it's "life" to the creator (government) therefore it can and should be subject to a "tithe" to it's creator. As humans, we are not subject to any tax from anyone but our creator. Last time I checked, I didn't see any requirement to pay a "tithe" (but a strong suggestion although it's unclear WHO you should make the check out to)...

Beware the cult of "government"...

if its for a service rendered then it wouldnt be a tax

it would be a fee.

A tax has 2 distinct attributes:
1) It is a nonconsensual taking
2) The taxing authority no obligation to provide anything in return.

ChristianAnarchist's picture

A "tax" is a theft...

A "tax" is a theft...

Beware the cult of "government"...