Why Corporate Income Tax Should Be Abolished Essay

Why Corporate Income Tax Should Be Abolished - Essay Example This would make the conditions of doing business in the country more friendly. As a result, foreign investors would flock the country in pursuit of the American dream. The main aim of the corporate income tax is to make sure that corporations too have a role to play in nation building by paying tax. The government provides the corporations with a good environment to do business and in order to support this; the government uses a substantial amount of funds. Therefore, the corporations should pay tax to ensure that the government is able to provide them with such services that enable them to be profitable. As much as the corporate income tax stands at 35%, some corporations have found ways to bring this number down to around 12%. This is has been made possible through the introduction of tax refunds. Wealthy individuals will also find ways to incorporate their wealth to their corporations’ wealth. This would mean that the government would lose more revenue. The author states that at some point in history when the personal income tax become high, wealthy individuals incorporated their wealth to that of their corporations in order to pay the much lower corporate income tax. If the corporate tax was to be scrapped off, it should be done in well calculated move. The benefits and the costs should be considered both in the long run and the short run. All the loopholes should then be closed to ensure people don’t take advantage of this as a way to avoid paying taxes. Such a move would spell danger to the American economy.