Tuesday, April 2, 2013

Corporate Taxation: Policy

Posted in response to this question on Quora:
 
Tax Policy: If corporations are people and have the same due process rights as American citizens, then why don't they pay equivalent taxes on their income?

Corporations are entities formed to exploit the physical and human resources of a community.  They provide a means of attracting large amounts of capital to finance large projects.  Some are beneficial and some are a detriment to the society that hosts them, but it is not easy to tell which is which because of the myths surrounding their operations.

The suggestion that corporations exist for the benefit of their shareholders is false; shareholders merely hope to profit from the operation.  Corporations exist for the well being of those who control them; the individuals who benefit from the airplanes, three-martini lunches, yachts, season tickets and luxury boxes at sports venues, limousines, chauffeurs and plush offices afforded corporate executives, free of taxation and passed off as business expenses.

Corporation are not taxed like humans and are allowed to become "Too Big To Fail" because, since the inception of the income tax, the sophistry of people like Mr. Richter have successfully influenced our lawmakers.

Fred Gohlke

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