Comments on: The Windfall Profit Tax: Bad Idea http://www.creditwritedowns.com/2008/04/windfall-profit-tax-bad-idea.html Finance, Economics and Markets Fri, 10 Feb 2012 00:37:00 +0000 hourly 1 By: Edward Harrison http://www.creditwritedowns.com/2008/04/windfall-profit-tax-bad-idea.html#comment-20 Edward Harrison Wed, 30 Apr 2008 16:53:00 +0000 http://www.creditwritedowns.com/2008/04/the-windfall-profit-tax-bad-idea.html#comment-20 I haven't heard that proposal. It would definitely eliminate double taxation problems. On its face, it sounds like a good idea. I'll have to give that more consideration. Interesting.<br/><br/>The problem, however, is the optics of it all. How could we eliminate corporate taxes when we have people screaming right now that corporations don't pay enough taxes?<br/><br/>With regard to non-profits, just like any other tax break or subsidy, the lack of taxes is designed to tilt capital toward non-profits. From a pure efficiency standpoint, this is bad. However, this seems to be a non-starter as most people (including myself) see equity as more important than efficiency. The average Joe believes a capital tilt toward non-profits makes society more equitable, just as the tax break on municipal bonds do.<br/><br/>In the end, some of these economic distortions have to be eliminated, if only to simplify the tax code. Remember credit card interest deductions? We got rid of that. And the UK has done away with most Mortgage interest deductions. I haven’t heard that proposal. It would definitely eliminate double taxation problems. On its face, it sounds like a good idea. I’ll have to give that more consideration. Interesting.

The problem, however, is the optics of it all. How could we eliminate corporate taxes when we have people screaming right now that corporations don’t pay enough taxes?

With regard to non-profits, just like any other tax break or subsidy, the lack of taxes is designed to tilt capital toward non-profits. From a pure efficiency standpoint, this is bad. However, this seems to be a non-starter as most people (including myself) see equity as more important than efficiency. The average Joe believes a capital tilt toward non-profits makes society more equitable, just as the tax break on municipal bonds do.

In the end, some of these economic distortions have to be eliminated, if only to simplify the tax code. Remember credit card interest deductions? We got rid of that. And the UK has done away with most Mortgage interest deductions.

]]> By: BethesdaBob http://www.creditwritedowns.com/2008/04/windfall-profit-tax-bad-idea.html#comment-19 BethesdaBob Wed, 30 Apr 2008 16:41:00 +0000 http://www.creditwritedowns.com/2008/04/the-windfall-profit-tax-bad-idea.html#comment-19 Why not eliminate the entire corporate tax system and treat corporations like partnerships are treated. Individual owners would be charged a taxed on their pro-rata share of earnings (GAAP based, of course). Taxes could be withheld from dividend or other distributions to ensure compliance. That way, individuals would pay taxes (at their own tax bracket) based on their share of the corporate income. Let's level the playing field and make non-profits pay too. Why not eliminate the entire corporate tax system and treat corporations like partnerships are treated. Individual owners would be charged a taxed on their pro-rata share of earnings (GAAP based, of course). Taxes could be withheld from dividend or other distributions to ensure compliance. That way, individuals would pay taxes (at their own tax bracket) based on their share of the corporate income. Let’s level the playing field and make non-profits pay too.

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