Home > Views > Blogs > Market Movers > Corporate Taxes vs Income Taxes
EMAIL
PRINT
RSS
SHARE
TEXT SIZE:
SHARE
Send a copy to me

Separate multiple email addresses (max 20) with commas.

0/1500

Main
Exxon's Hoard   Left-Wing Democracy in Action, Ecuad...
Jun 5 2008 10:37AM EDT

Corporate Taxes vs Income Taxes

Confused by the fight between Greg Mankiw and Brad DeLong over whether or not we should cut the corporate tax rate? Well, this is likely to confuse you even more: Steve Waldman has a great evisceration of Mankiw's arguments - and then proceeds to say that cutting the corporate tax rate is a great idea, and such a tax cut should be paid for "by increasing the highest marginal tax rate, or better yet, by creating a new top tax bracket".

I don't get it. I have one big reason for not supporting a decrease in the corporate tax rate, which is that the bigger the gap between the corporate tax rate and the top marginal income tax rate, the more top-earning individuals will figure out a way of turning themselves into corporations. In other words, a cut in the corporate tax rate is a cut in the income tax rate, even if you hike income taxes at the same time. Do we really want a world where corporations don't have highly-paid employees, but rather outsource key managerial functions to sole proprietorships? If not, then I'd recommend keeping corporate taxes and income taxes at roughly the same level.

See more in

Loading...

Add Your Comment

Required fields are marked with an asterisk (*)
Add a comment

Recent Blog Posts

Archive

Previous
Dec
2008
Next


Also in Portfolio.com
Most Read
Most Emailed
Recently Commented