Tax Justice Network
Ten Reasons to Defend the Corporation Tax (2015)
“A long-running smear campaign against the corporate income tax has
created a widespread belief that the corporate tax is a bad, ineficient tax (…)
This document skewers these myths and reveals why the corporate income tax
is one of the most precious of all taxes”.
Ten Reasons…
1. Revenue
Good for developed countries and better for developing countries.
2. Backstop: Corporate taxes hold the whole tax system together
If the corporate tax were abolished, this would tear a giant hole in the
personal income tax for wealthy people. They would simply form shell
corporations and escape their income taxes by claiming that their earnings
are not ordinary personal income but the income of the corporation.
3. The corporate tax curbs inequality and protects democracy
Soaring profts would be more money for corporations and less money for
employees and society (less wages, benefts and taxes). Additionally, those
profts represent more (political) power for corporations. Taxing corporate
profts reduces concentration of wealth. Then, a corporate tax curbs both
economic and political inequalities, as well as it is one of the most progressive
taxes.
4. National tax ‘competitiveness’ is fool’s gold : corporate taxes enhance
national welfare
The corporate tax is not a cost to an economy, but a transfer within it: from
one wealth-creating sector (corporations) to another wealth-generating sector,
government, which creates and protects wealth through education, roads,
courts, police services and so on.
Reducing corporate tax does not attract “useful” investment but unproductive
profts-shuffing and accounting non-sense.
5. Corporate tax cuts ricochet around the world (Spillovers)
If one country makes corporate tax cuts, the efects will afect to other
countries (tax heavens, harmful tax competition, etc.)
6. Corporate taxes are particularly important for developing countries
Corporate taxes make up a much bigger share of taxes in developing countries
than in the richest ones. Also, large companies are easier to charge than
individuals or microbusiness. Without corporate taxes, there would be a
Ten Reasons to Defend the Corporation Tax (2015)
“A long-running smear campaign against the corporate income tax has
created a widespread belief that the corporate tax is a bad, ineficient tax (…)
This document skewers these myths and reveals why the corporate income tax
is one of the most precious of all taxes”.
Ten Reasons…
1. Revenue
Good for developed countries and better for developing countries.
2. Backstop: Corporate taxes hold the whole tax system together
If the corporate tax were abolished, this would tear a giant hole in the
personal income tax for wealthy people. They would simply form shell
corporations and escape their income taxes by claiming that their earnings
are not ordinary personal income but the income of the corporation.
3. The corporate tax curbs inequality and protects democracy
Soaring profts would be more money for corporations and less money for
employees and society (less wages, benefts and taxes). Additionally, those
profts represent more (political) power for corporations. Taxing corporate
profts reduces concentration of wealth. Then, a corporate tax curbs both
economic and political inequalities, as well as it is one of the most progressive
taxes.
4. National tax ‘competitiveness’ is fool’s gold : corporate taxes enhance
national welfare
The corporate tax is not a cost to an economy, but a transfer within it: from
one wealth-creating sector (corporations) to another wealth-generating sector,
government, which creates and protects wealth through education, roads,
courts, police services and so on.
Reducing corporate tax does not attract “useful” investment but unproductive
profts-shuffing and accounting non-sense.
5. Corporate tax cuts ricochet around the world (Spillovers)
If one country makes corporate tax cuts, the efects will afect to other
countries (tax heavens, harmful tax competition, etc.)
6. Corporate taxes are particularly important for developing countries
Corporate taxes make up a much bigger share of taxes in developing countries
than in the richest ones. Also, large companies are easier to charge than
individuals or microbusiness. Without corporate taxes, there would be a
