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Who Cares About Corporate Taxes?

Write-Off: The Tax Blog

Politico has a webpage where they have what different 2020 democratic candidates think about different policies. Of course, I am most interested in the taxes webpage. There are several tax issues on which the candidates have opinions—tax credits, corporate taxes, capital gains taxes, wealth taxes (Politico picked the categories).  Which topic has the most candidates with a stated opinion? Is it tax credits or capital gains taxes, which probably affects the most actual individual Americans directly (of the Politico categories)? No.  It is corporate taxes.

Corporate taxes raise an incredibly small piece of our total revenue, now about 6%. Even if you doubled that, which no one is proposing, that is still not much of the total revenue.  If candidates are worried about raising the revenue necessary to fund government services, why not target something that has a larger potential for growth as a revenue source? Why talk about corporate tax?

I am not sure. But my guess is that you offend extremely few voters, especially democratic voters, when you mention increasing corporate taxes. Of the things that “bother” Americans about our tax system, according to a 2015 Pew Poll of Americans*, the biggest bother is that corporations do not pay their “fair” share in taxes. Even a majority of Republican’s polled believed corporations didn’t pay enough, and this poll happened before we reduced the corporate tax rate (although, frankly, I doubt the actual statutory rate, or the actual tax burden of firms, affects the respondent’s opinions much).

So, what is a politician in a democracy to do?  Talk about corporate taxes. It may not pay the bills, but it certainly touches a nerve with the populace, which is how one gets elected.

*No corporate person was polled.

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