Imaginary Tax

This post over at Marginal Revolution raises a question that never gets talked about in conservative circles. Conservatism today is mostly libertarianism with some lip service to cultural issues, so you would think they would be champions of scrapping business taxes entirely. Even if they could not muster the courage for that, they could certainly champion simplification. That seems like a thing that no one can oppose, as no one thinks more complexity is every a good thing.

Yet, we never hear much from supposed pro-capitalist types about a zero income tax on business. Politically, it has the obvious defect of seeming to be pro-rich people, but people are not that dumb. Some will fall for the liberal argument conflating business with the rich, but most could be persuaded to see that is false. Persuadable voters can also be sold on an idea that will get them a job or a raise, too. A zero business tax would instantly make America a magnet for every global corporation on the planet.

There’s another piece that would be good politics. The candidate running on this idea could tie it to political reform. Our politicians no longer serve the people. Instead they extort money from business by selling them indulgences in the form of tax breaks. John McCain has often said he spends too much time shaking down businesses and threatening them with taxes if they don’t give him money. Remove the weapon and he and his pals can no longer use that weapon to shake down business.

The other benefit is it would allow the Republicans to make the Democrats talk about the details of business taxes. Corporate taxes end up in one of two places. That’s the price of the product or the employee’s paycheck. Taxing business is a false populism. that the Left has for years used to fool the working man. A reasonably savvy pol could turn this on its head and argue it is a hidden tax on working people. It’s not an easy sell, but it shift the frame and breaks the Progressive paradigm.

But, Republicans are not called The Stupid Party for nothin’.

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