TOS Blog: Daily Commentary from an Objectivist Perspective

Wednesday, January 25, 2012

Double-Taxation Means Double Injustice for Romney

Posted by Ari Armstrong at 3:44 pm

Mitt RomneyWhy do the same people who continually cry that “corporations aren’t people” want to tax them as though they were? Corporations are voluntary organizations of individuals. The law should protect the rights of each individual (including the right to speak as part of a group), not impose double burdens on individuals who happen to participate in corporations. Yet today’s tax code punishes individuals who invest in corporations twice: once at the corporate level and once at the individual level.

Thus, far from getting off easy on his taxes, Mitt Romney suffers unjust double taxation. John Berlau and Trey Kovacs explain this important context in an article for the Wall Street Journal. They write, “Our tax code layers taxation of dividends and capital gains on top of a top corporate tax rate of 35%,” and such “double taxation brings the effective tax rate on investment income to as much as 44.75%.”

At least Romney wants to limit the corporate income tax rate to 25 percent. But he should go much further and call for the abolition of all corporate taxes with a commensurate cut in federal spending. Not only would that end this injustice of double taxation, it would protect the rights of corporations to use their resources to create wealth, profits, and employment.

Romney’s critics are right about one thing: It is grotesquely unfair to tax individuals who earn less an even greater proportion of their income. Thus, as a good first step tax rates for all individuals should be reduced to 15 percent or less. Forcing some people to hand over a third or more of their earnings to the politicians and bureaucrats of the federal government is a blatant violation of their rights.

Related:

Image: Creative Commons by Brian Rawson-Ketchum via Wikipedia

Posted in: Business and Economics, Presidential Candidates

Comments are welcome so long as they are civil.
  • Anonymous

    Incidentally, my dad and I wrote about this topic last year: http://blog.ariarmstrong.com/2011/08/corporations-arent-people-so-stop.html -Ari

  • https://me.yahoo.com/a/ffXz3Fcmq.XFH_Yl__T2G9rL1aU3#8a634 Mike Kevitt

    True, what you say, here, in its general thrust.  But, a tax code is, radically speaking, not a law.

    Any legislated document which imposes a double burden or punishes for investing, whether once or twice, in something is not a law.  If it’s counter to, or violates a right, it’s not a law.  It’s a criminal document or plan, whether legislated or not.  A legislated document which protects a right IS a law.  It recognizes rights.  So, it’s not really right to say a “law should protect” rights.  A law DOES protect rights.  It’s not right to say a law shouldn’t burden or punish counter to rights.  If it does, it’s not a law, but a criminal document or plan, even if it’s legislated.

    The nature and substance of the document determines whether it is, or can be, a law. Individual rights is the basis of law, the basic legal principle.  Law is the basis of government.  Rights are the basis of government.  Egoism demands rights, out in the open.  Altruism demands crime, under cover, best of all, under the cover of the GUISE of due process, legislation, law and government, and by the physical POWER thereof, taken by infestation of crime, as altruism stems from unreason and false metaphysics.

    I’m speaking radically, here, from the standpoint of Objectivism’s full expression in human relations in a culture governed by law.  In today’s mainstream culture, it would sound uninterpretable.  But it’s true and, I think, familiar and expected among Objectivists.  And, the time’s comin’ when Objectivists must make everybody else KNOWLEDGEABLE of it, and used to it.