Corporate Tax Should be Lowered

There is an important distinction to make between the tax rate for publicly traded companies and the actual percentage amount they pay. The disparity is due to tax loopholes such as off-shore banking and a host of other maneuvers performed by corporate lawyers. Even if these loopholes were closed through legislation, I disagree that the corporate tax rate should be lowered. There are two fundamental lines of reasoning behind my objection. The first is based on empirical observations, the second with philosophical issues about growth. Both of course are interrelated. Like private citizens, the private sector benefits from public goods such as public education, publicly owned and operated infastructure, general law and order maintained by police, and various federal agencies, especially in maritime contexts. The integrity and efficiency of these public goods would suffer if corporate tax rates were lowered, and this in turn would cause business costs to rise. If corporations tried to shoulder these costs themselves, for instance through privatized security, their ability to remain solvent would diminish. In general, the costs of doing business would increase, and those costs would be passed onto the consumer. Corporations also benefit from social welfare funds in ways that are not always obvious. Many retailers and restaurant corporations do not pay their workers a living wage. As a result those workers are forced to seek assistance from the government through such aid programs as food stamps. The taxpayer is effectively subsidizing the costs of maintaining a workforce for many corporations. Some of the societal benefits stand in direct conflict with the interests of the corporation. For instance, federally funded advocates of environmental defense and consumers rights must maintain freedom from the machinations of the corporation in order to do their job. The second aspect of my objection is theoretical, that is it has to do with the determinations of concepts. (I don't want to sound condescending, it's just that in mainstream discourse there is usually some confusion about the distinction between the practical and theoretical spheres.) Corporations are not free agents; that is, they cannot, by definition, self-legislate. I mean this in the descriptive, not normative, sense. The concept of a corporation demands that it profit; it must answer to shareholders, and all other considerations--whether ethical, aesthetic or even legal--are subordinate to this demand. That means that the costs of growth are always ultimately translated into dollar amounts. Likewise, the benefits of growth, strictly speaking, can only be reflected in dollar amounts. Of course, they can be translated once again into societal benefits of all sorts, but that is a matter of interpretation that lies beyond the calculus of corporations. This is partly why, for instance, from a legal point of view, a corporation's liability is limited to its investment. My objection, then, is that it is not even clear that the public has any interest in incentivizing investment into the private sector. I only say this because it seems to me useful to also bring into question some of the grounds on which the claim is being made. Thank you, and I look forward to your response.