The fairest approach to the corporate income tax would be to just tax corporate earnings directly to shareholders, the way the earnings of most small companies are taxed now. For public companies, there would be a withholding tax of 20 to 25 percent, which would then be claimed as a credit against shareholders’ personal taxes when they get their dividends.
For anybody who thinks the corporate income tax is a free lunch for the rest of us, it isn’t. Corporations don’t exist except in the imagination of the lawyers who create them — they don’t have kids, housing issues or medical problems. Any taxes they pay end up being charged to somebody else — customers, vendors and/or employees. Since corporate taxes are only about 10 percent of federal revenue anyway, why not? It would make the whole thing simpler and fairer.
As for tax cuts, forget it — the government already spends 15 percent more than it collects in taxes and runs deficits every year, regardless of who is in office. Any realistic tax reform plan should aim to collect enough money to cover the government’s bills and put an end to debates about the debt ceiling.
Christopher Toews, Atascadero