On December 3rd, we published Michael Kraten’s opinion piece If Corporations Are People, Why Aren’t They Taxed Like People? You can find that piece, and all of our other blog posts, on our blog page at AAAPublicInterest.org.
But Michael’s post did not bring an end to our taxation policy conversation! Two of our colleagues then responded with follow-up comments.
First Andrew Felo of Nova Southeastern University noted that “individual owners of the corporation also pay income tax on the corporation’s earnings. That means the income is taxed at a much higher rate than 20%.”
Why is that important? Because it addresses the concern that the corporate tax rate is about to be reduced to a level that is far less than the individual tax rate. Nevertheless, the two-tiered nature of our system of corporate taxation does illustrate Michael’s original observation that “corporations aren’t taxed like people.”
And then Wm. Dennis Huber of Capella University suggested that: “To see how the Supreme Court has created corporations as persons, see Law, Language, and Corporatehood: Corporations and the U.S. Constitution, and The Supreme Court’s Subversion of the Constitutional Process and the Creation of Persons ex nihilo.” Both are available at Dennis’ SSRN page.
We thank Andrew and Dennis for responding to our recent post with these insightful comments. And we shall continue to publish our colleagues’ perspectives regarding the American system of taxation.