Sunday, October 22, 2017

My Posted Comment To Larry Summers' Washington Post Piece Against Lowering Corporate Taxes

My posted comment to The Washington Post, Wonkblog, "Lawrence Summers: One last time on who benefits from corporate tax cuts" by Lawrence H. Summers:
If Larry Summers believed his argument that corporations should be taxed, he would argue for taxing not for profit corporations. His arguments are underpinned by the belief that the government is a wiser spender of the tax money than a non-governmental entity, such as a private corporation, or individual. Either Summers' argument is true for all entities or it is true for none. To tax some entities and not all entities requires the government through its tax code to be able to do a better job of picking better investments and winners over losers than our capitalistic system. Experience over hundreds of years has shown that as much as we would like to believe governments can do better than a selfish profit motive owner, the reality is that decisions affected by politics and the self-interest of politicians attempting to remain in office leads to far worse societal outcomes than capitalistic motives. Not for profits and governments are not economically self-sustaining and can only continue to fund their endeavors off the labor and profit of the private sector. Corporate owners and shareholders, who are the beneficiaries of rising asset values and stock prices, are better deciders of how to use their funds to sustain and grow our economy. Taxing corporations creates economic dead weight loss since the money spent by the consumer is less than the money received by the corporation. It also diverts monies into non-productive and inefficient attempts to reduce taxes. Even if all of Summers arguments are correct, by removing or lowering corporate taxes, the cost of government is shifted to individual taxes, and individuals will receive a truer price signal that shows how much government involvement in their daily lives really costs. With truer price signals, individuals will have a much better picture of the cost and value or lack of value of government programs.