In response to the much-ballyhooed news reports about large corporations paying little to no taxes in a given year, Democratic nominee and former Vice President Joe Biden added a proposal for a minimum 15 percent tax on corporate profits to his platform. That may prove politically popular, but as the coronavirus-induced recession reminds us, it’s terrible policymaking.
To begin with, there is no plague of corporations abusing tax “loopholes” to zero out their tax liability. Corporate income taxes do not compare well to personal income taxes, as they are assessed on the basis of corporate profits, not gross receipts. Corporate profits, much more than the average taxpayer’s annual income, can fluctuate wildly from year to year.
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