Megan McCardle’s Comedy Routine
Megan McCardle wrote an article that allegedly to make a case for eliminating corporate income taxes. It’s somewhat intellectual humor, so I’ll deconstruct one paragraph as an example.
The corporate income tax doesn’t raise that much money It’s not nothing—about $300 billion. But we could recoup a whole lot of that simply by taxing dividends and capital gains as ordinary income, and perhaps tweaking top rates. That might be a bargain conservatives would go for.
On the surface it’s not funny. You have to know that corporate income taxes (CIT) in 2008 ran about 12% of total US revenues while individual income taxes (IIT) ran about 46%.
For the IIT as a whole to cover CIT the average has to go up by 26%. For it to only be dividends, capital gains and tweaking the top rate, well, those would have to increase a lot more than ‘only’ 26%.
Given the complaints over a mere 3%… I laugh myself silly every time I read it.
[edited to add link to McCardle’s article]