Subject: Tax; change Comment: Dear Sirs: Why don't we replace the corporate income tax with a corporate carbon tax? Corporate taxes eventually get passed on to consumers, so corporations aren't really paying taxes, but rather acting as collection agents.(1) However vs. the corp income tax, a corporate carbon tax (levied on first domestic purchasor)would in part at least be paid by foreign oil suppliers as reduced demand resulted in lower energy prices. Further, and more importantly, we would shift taxation from penalizing, productivity and creativity towards rewarding energy efficiency and penalizing waste. In addition, a corporate carbon tax would be much easier to asses and collect than the current corporate income tax. I calculate that consumer energy prices would have to rise about 15% to account for enough carbon tax to offset the corporate income tax. The transition from one system to another would have to be thoughtfuly designed, but is eminently doable. Why not? (c) Respectfully, FS Johnson (1) If I remember my college economics aright, in a fully competitive economy, capital flows like water to equalize risk-adjusted returns. If a corporate income tax reduces those returns, capital is witheld from that activity until demand and supply re-equilibrate at a price level that provides for a market rate of return. Conversely, .......etc., etc. |