Duke2Earl wrote:The corporations will not give up their cash hoards...period.
Huh? Nobody asked anyone to "give up" any cash "hoard."
A better question is why on Earth would any corporation repatriate their offshore earnings to the US (on which they have already paid the appropriate local foreign taxes) if they have to pay 35% minus [foreign taxes paid] to bring them to the US?
They wouldn't, they're not crazy. They can invest that money where it is, or anywhere else other than the US. They might prefer to invest it in the US, but the effect of the nasty haircut of additional US tax cost on capital costs says forget it.
The last time -- 2004 -- we let them bring already-taxed foreign earnings back with a minimal US tax cost -- 5% -- 350 billion was repatriated.
The capital influx to the US would be shocking with a US corporate tax rate of zero, should we ever be so fortunate as to see it. And it won't just be formerly-foreign US corporate cash coming here, the rest of the world will beat a path to our door.
Duke2Earl wrote:No corporation anywhere will ever reduce prices or increase salaries because their tax burden has declined. It will just all go to additional profit (especially if that profit isn't taxed).
Really? Are you are of the opinion that no "excess" profit is ever competed away? As it always has been, for hundreds of years?
Nah, no new possible new entrants will think that they now can pay a little more to attract employees and/or sell the resulting product or service at a little lower price.
No existing company will ever think "Gee, now we can give a raise to those employees we really value and don't want to be lured away by competitors offering more money." Or, "Hey, now we can recruit some better employees." Or, "Let's grab some market share from the rest of these dinosaurs by cutting prices a bit, we've got a little room now to do so."
Nope, none of those calculations would ever be made. More than a million times a day.
Any way you slice it up, what used to pay hidden "corporate income taxes" would shortly be allocated between higher wages (the vast majority of it) and lower prices.
I figure that it would take less than a year for most of the effects to filter throughout the entire economy. People aren't stupid and we're only talking about 350 billion a year -- 2% of GDP -- to be reallocated by the market. Child's play.
The biggest benefit of the abolition of corporate income taxes would be an increase (perhaps small, or perhaps not-so-small) in the standard of living due to increased productivity due to increased investment in the US. It's like a freebie just lying there on the floor, waiting to be picked up.
Picking it up, of course, would mean more tax revenue, too. More than was lost from the loss of "corporate" income taxes.
From individuals. No longer hidden in bogus "corporate" taxation.
All the States incorporated daughter corporations for transaction of business in the 1960s or so. - Some voice in Van Pelt's head, circa 2006.