November 7, 2017

TAKE A BITE OUT OF THIS: Apple’s secret tax bolthole revealed.

As others (and myself) have written many times before, corporations don’t pay taxes — they collect them. Any taxes are actually paid by customers (higher prices), employees (lower wages), shareholders (smaller returns), etc. The ideal corporate tax rate is therefore zero, but politically that would never fly. Instead we have a tangled mess of corporate tax law, which benefits large corporations with their armies of lawyers and lobbyists. Small corporations which can’t afford all that are put at a competitive disadvantage, not to mention sole proprietorships which pay through the nose on everything.

But since we can’t get an ideal corporate tax rate, a flat and transparent corporate tax would be the next best thing. Our current system is the worst of all possible worlds: It diverts resources and manpower away from investment and innovation, and stifles entrepreneurs to the benefit of established interests.

On the other hand, our system creates endless possibilities for corruption and graft. So it has that going for it. Which is nice for Washington.