Something I hope to expand upon is societal drift toward nothing.
Our money is predicated on nothing. Our entertainment consists of watching stories that didn’t happen or worse, clicking links that amount to “15 reasons that are unreasonable” or clicking with the expectation that we “won’t believe what happens next” when we will predictably believe what happens next.
Our ethics are approaching nothingness – when our condemnations of unethical behavior concern the ablist mocking of a journalist, more than the fact that Canada, the U.K., and the U.S. are complicit in the current genocide in Northern Yemen.
The pinnacle of our drift toward nothingness is corporate tax.
Corporations don’t actually exist. They have no existential referent. They are a legal abstraction of things that are real. Taxing corporations is the taxation of nothing. Yet I can hardly discuss this issue for more than 30 seconds with any politician without hearing their repetitious ad nauseam, “corporations must pay their fair share.”
Corporations have three components: shareholders, employees, and customers.
The remarkable folly in taxing corporations is that governments are relinquishing the control over taxation to company managers.
They get to decide whether or not the corporation will take a cut in profits, or if employees will sacrifice a wage increase, or if the customer will pay more for the product. The relinquishing is found in that governments already have mechanisms to tax each of these, they can tax shareholders through dividend and capital gains taxes; they can tax employees through income taxes, and customers through sales taxes.
They relinquish their capacity for deciding on which of these components is taxed to the managers who decided on it.
A 2008 OECD study by Jens Arnold confirmed that corporate tax is the most damaging in terms of personal income growth. If managers decide to pass the tax onto consumers then the price of the product goes up, increasing the cost of living, decreasing the purchasing power of our wage.
Another 2008 study done by the former World Bank chief economist, Simeon Djankov, had examined 85 countries and determined that every 10% increase in corporate tax averages to a 2% decline in GDP.
Empirically, it is by far the more economically deleterious tax on a nation. In spite of the economical burdens, my anecdotal and proverbial observation is that the average leftist will demand a higher corporate tax rate without actually knowing what the corporate tax rates are. Moreover, most federal tax codes in the developed world are lengthier the Bible – and completely understood by no one.
All of this is to say that a desire to increase corporate taxes is really a desire to increase an unknown quantity, on a non-existent thing, to fuel a process that isn’t understood, while what is known – the empirical studies, suggests this is a bad idea.
This is the triumph of rhetoric over substance, of nothing over something. Corporate tax is the ultimate triumph of a systematic subtraction from the individual. It’s the ultimate statement of, “I know not what, but as long as the state triumphs and the individual falters, all is well.”
Brandon Kirby
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