Corporate Tax Should be Lowered
Rules are as follows:
Round 1: Acceptance/Informal short summary of primary argument.
Round 2: Statement of Opening Arguments.
Round 3: Continuation of Argument and Rebuttal.
Round 4: Final Rebuttal and Conclusion.
Please, do not troll.
Even if these loopholes were closed through legislation, I disagree that the corporate tax rate should be lowered. There are two fundamental lines of reasoning behind my objection. The first is based on empirical observations, the second with philosophical issues about growth. Both of course are interrelated.
Like private citizens, the private sector benefits from public goods such as public education, publicly owned and operated infastructure, general law and order maintained by police, and various federal agencies, especially in maritime contexts. The integrity and efficiency of these public goods would suffer if corporate tax rates were lowered, and this in turn would cause business costs to rise. If corporations tried to shoulder these costs themselves, for instance through privatized security, their ability to remain solvent would diminish. In general, the costs of doing business would increase, and those costs would be passed onto the consumer. Corporations also benefit from social welfare funds in ways that are not always obvious. Many retailers and restaurant corporations do not pay their workers a living wage. As a result those workers are forced to seek assistance from the government through such aid programs as food stamps. The taxpayer is effectively subsidizing the costs of maintaining a workforce for many corporations. Some of the societal benefits stand in direct conflict with the interests of the corporation. For instance, federally funded advocates of environmental defense and consumers rights must maintain freedom from the machinations of the corporation in order to do their job.
The second aspect of my objection is theoretical, that is it has to do with the determinations of concepts. (I don't want to sound condescending, it's just that in mainstream discourse there is usually some confusion about the distinction between the practical and theoretical spheres.) Corporations are not free agents; that is, they cannot, by definition, self-legislate. I mean this in the descriptive, not normative, sense. The concept of a corporation demands that it profit; it must answer to shareholders, and all other considerations--whether ethical, aesthetic or even legal--are subordinate to this demand. That means that the costs of growth are always ultimately translated into dollar amounts. Likewise, the benefits of growth, strictly speaking, can only be reflected in dollar amounts. Of course, they can be translated once again into societal benefits of all sorts, but that is a matter of interpretation that lies beyond the calculus of corporations. This is partly why, for instance, from a legal point of view, a corporation's liability is limited to its investment. My objection, then, is that it is not even clear that the public has any interest in incentivizing investment into the private sector. I only say this because it seems to me useful to also bring into question some of the grounds on which the claim is being made.
Thank you, and I look forward to your response.
Instead of arguing the economic benefits, you argue political drawbacks.
As of 2013, the United States has lead the world in Corporate Tax percentage, which is set at 39%. Our tax rate has not changed in a matter of 2 years, with regard to corporate tax. 
On a ratio with our GDP, Corporate Taxes amount to 2% of our 18 trillion GDP, which amounts to $360 billion.
While we pronounce ourselves to be the most Capitalist nation, we impose heavy taxation on both our businesses and general income. Incorporation in Canada, which is famous for it's high taxes and government spending in relation to population, is easier and cheaper than incorporation in the United States. Our corporate tax is not only a burden but it is also a deterrent to future companies. I myself am working for a company made by American citizens but incorporated in Canada, due to their lower tax rate and fees.
The main debate on Capitalism is that we get to keep our profits, if accumulated legally. The profits of companies are accumulated legally, and they deserve to keep those profits, regardless of moral implication.
The main argument that many opponents of a lowered Corporate Tax create is that we cannot afford to lower it, which we most certainly can. Instead of professing about an increase in tax or a stability, we should decrease spending on par with a decrease in taxes. An overall incentive to incorporate in the United States will not only create an excess of jobs, but it will bring in an incredible amount of money. It is much more beneficial to tax 15% to 100 people, rather than taxing 39% to 50 people, as eventually, that number will decrease.
Our current ideology is that instead of lowering taxes and fees, we will raise them as to create further burdens on the corporations that remain.
Rand Paul, a ideologically Libertarian Republican presidential candidate stated that we have an excess of $2 trillion overseas, that we could bring into the United States if we lowered the Corporate Tax.
"My objection, then, is that it is not even clear that the public has any interest in incentivizing investment into the private sector." The public has no say as to whom may or may not invest into the private sector. It is not up to the collective decision of a public entity to dictate how and who invests into which specific private market. Most companies, such as Apple, Microsoft, Yahoo, and Google, have public stocks, which enable all willing parties to hold stocks in that specific company.
The private sector rarely benefits from public education. Most private sector jobs require a higher level education, which is in most cases provided by a private university or college.
You seem to believe that taxes are collected and then distributed randomly. Each tax pays of each part of the government or public platform. This debate does not center over the complete abolishment of Corporate Tax, but instead centers around lowering this specific tax. Due to safety in investing in the United States, paired with a significantly lower Corporate Tax, we could bring in a great amount of companies as well as private sector jobs, and eventually make even more money in taxes than before.
And that's okay of course, but let's actually try to start the debate. First, there is the empirical aspect of it, which requires calculations and some guesswork about what corporations might or might not do given a change in the tax code. Second, it necessarily involves interrogating the meaning of a corporation, since we are referring them to discrete revenue and expenditure categories that are different from private citizens and non-profit organizations.
You are wrong to say that I am arguing "political drawbacks" instead of economic benefits. We are debating political economy--that point at which they intersect, to put it into academic terminology. It is useful at times to distinguish economic calculations from policy, but to fail to see how they inform one another distorts the bases on which these kinds of decisions must be made.
First, I will address the empirical aspect of the argument. Then I will respond specifically to each of your points.
As I indicated in my objection, the question of raising or lowering the tax rate for corporations cannot really be approached without consideration of the fact that many of the richest corporations do not pay anywhere near the going rate. According to the Government Accountability Office, the average corporate tax rate is only 12.6%.
A report from the Citizens for Tax Justice found that 30 of the biggest 280 corporations had no federal tax liability whatsoever.
The argument that lower tax rates will keep business in the U.S. ignores these disparities. The assertion becomes more ridiculous if we ask just what the tax rate should be. Those thirty companies that completely dodged the tax system through offshore maneuvers have no incentive to bring business back into the U.S. no matter how low the rate is. If we still entertain illusions that the global market will somehow correct this, we can refer to this study:
Nor are corporations to blame for the fact that they dodge taxes. Which indicates the significance of my second point. It is misguided to try to blame corporations for being greedy, and the recent attempts to publish CEO pay as a way of shaming these great disparities in wealth are rather pointless, because as I said above, all considerations for a corporation are subordinated to those of the bottom line.
The issue, as you said, is not whether to abolish the corporate tax altogether. The rate reflects the societal costs of protecting the public from the inherent abuses of corporate activity. Now, that is a difficult calculation to make because many of those costs are integrated into a whole web of public and private institutions. In an obvious way, this means that the corporate tax rate needs to contribute paying for the SEC, FDA, EPA and all the hosts of other agencies out there whose job is to protect the public good from the undesirable results that occur when a corporation does precisely what it's supposed to do, that is make money at all other expenses. The argument that lowering the rate will incentivize business investment ignores the complexity of these costs. That is what I was getting at in the first part of my argument, which your rejoinder ignored. Corporations rely on able-bodied Americans to buy their goods and to supply them with labor. It is this complexity that maybe gave you the mistaken notion that I thought tax revenues were distributed randomly.
My understanding of it is that there are three metrics on which the rate is decided:
1) equity, which evaluates how the tax rate is distributed across individuals taxes
2) efficiency, which tries to address potential distortions in the decision-making process due to tax burdens
3) competitiveness, which is, admittedly the most vague of the three--but it has to do with maintaining rates that are comparable to those of other nations with similar GDP.
It is the third that seems to be your best shot for arguing the tax rate should be lowered. Yes, it is vague, but it is a problem only because we do not tax pure profits, as explained here (p. 16-17 specifically)
You said that while "we pronounce ourselves to be the most capitalist nation, we impose heavy taxation." Well, people pronounce a lot of things all the time--but if we mean by "most capitalist nation" that we are or should be engaged in some kind of free market laissez-faire system, completely free of public oversight, then you are mistaken. The so-called free market has already demonstrated that, left to its own devices, it is patently destructive and fatal to human interests. We have known that for more than a hundred years. In any case, that is a historical point which we can take up if you'd like.
Nor do the present facts justify characterizing taxation on business as heavy, when compared with other industrialized nations. According to the findings of the CRS report mentioned above, the U.S. statutory rate is the highest, but the effective rate is the same as other OECD nations. In fact, the U.S. "collects less in corporate tax revenue relative to Gross Domestic Production (GDP) (2.3% in 2011) than the average of other OECD countries (3.0% in 2011). "
As for your remark that the public has no say about investment in the private sector, yes, of course. But you missed the point. The issue is not dictating investment--it's that we have good reason to question simplistic narratives about growth, narratives that come from the financial industry and corporations that consecrate growth and try to convince us that it is an undeniable good.
Lastly, you said that "[t]he private sector rarely benefits from public education. Most private sector jobs require a higher level education, which is in most cases provided by a private university or college." That preposterous statement is not the sort that will become any less preposterous by looking at the numbers, no matter how you spin them. For one, it's way too sweeping. Also, there is a huge part of the private sector that requires no level of higher education--nearly all the workforce of restaurant and retail industry, including the folks that make your burger or ring you up at the Walmart, nor their managers, known as middle-management, and a whole host of other working people on whom the private sector relies for the delivery of its goods and services. But more importantly, it is a gross distortion to separate the actual functioning of the private sector from the interests of the public good. Yes, there are specific occasions when such a distinction is required--for instance in legal contexts--but if decisions are to be made about political economy, we must find a perspective that understands how they interact.
Your main argument encompasses the negatives of a lower Corporate Tax paired with the ability to create loopholes in taxation and end up paying very little either way. In this debate, I never stated that we should keep these loopholes. This is strictly based upon the assertion that corporate tax is entirely too high, and that we should lower it.
In the end, a nation that focuses on free trade would slash the corporate tax rate completely, and keep it at a stable 0. If government also cuts their own spending, this would be easily affordable for the United States. On a competitive level, however, we do have the highest corporate tax rate among other industrialized nations. Whether many of our own companies pay this amount is up for another debate, but the stable fact is that we have the highest corporate tax.
We definitely should focus on closing up loopholes, but paired with a lower tax rate, as these loopholes are the only reasons why the remaining corporations have stayed in our nation.
There are many benefits to a lowered corporate tax rate:
1. Cutting the corporate tax rate will promote higher long-term economic growth.
2. Cutting the corporate tax rate will improve U.S. competitiveness.
3. Cutting the corporate tax rate will lead to higher wages and living standards.
4. Cutting the corporate tax rate will boost entrepreneurship, investment, and productivity.
5. Cutting the corporate rate lowers the tax burden on low-income taxpayers and seniors.
6. Cutting the corporate rate will lower the overall dividend tax rate and taxes on capital.
7. Cutting the corporate tax rate can attract foreign direct investment (FDI).
8. Cutting the corporate rate would lead to lower corporate debt and reduce the incentives for income shifting.
9. Cutting the corporate tax rate can reduce compliance costs.
10. Cutting the federal corporate rate can help the states compete globally.
You have also stated that corporations benefit from publicly funded organizations, such as roads, education systems, police officers, etc. Evidently, this is true. The argument here is that corporations could do the same in other nations, but people could not. In order to have safety, the government must devote funds to public organizations, which pairs with corporate likeability.
Making an argument centered around the complete obliteration of the corporate tax without the complete deletion of tax loopholes will ultimately fail. For one to make an argument such as this, that person will ultimately need to understand the reason as to why there are lobbyists and tax loopholes. Our high tax rates ultimately effect corporations, and cause them to ship both jobs and capital overseas, into nations such as China or India that have much lower tax rates and much easier loopholes.
Instead of basing our ideas on the general morality of corporations, which does not exist, we would create a comprehensive tax system that eliminates deception and incentivizes corporate investment.
Being a Libertarian, I oppose all taxation plans, but I see most as realistically needed for the government to properly function. In the case of business, there should be little to no taxes, including both income and corporate tax. Business is based upon profit, and the desire for more profit, which people associate with the term greed. A government created legislation that undermines this desire for profit will be met by a dissociation of that profit base and relocation to a less restrictive nation, such as China and India. The three largest expenses of a corporation are wages, taxes, and supplies. As supplies and wages are necessary for the continuation of the company as well as employees desire to work in said company, removing those would be unrealistic. On the other hand, a relocation of taxes, whether based upon net revenue or net profit, would drastically impact interest of corporations as well as ability to function on a larger scale.
You have previously stated that many corporations do not require a higher level education, which is wrong. According to the following source  (Link will be stated below), our job sector’s need for education has increased dramatically throughout the next 40 years. In accordance with this information, your argument creates the illogical fallacies that state funded education is required for these corporations to function. This may be true if you take in account the entire world, as there will be nowhere else for the corporations to go, but in the matters of the United States, which is our debate’s primary focus, state funded education will benefit the people more than the corporation.
While you may believe that tax cuts will benefit the corporation more than the people, it is still clearly evident that lower taxes always equates to more incentive. We would effectively eliminate all need for tax lobbyists and special interest if we created a comprehensive tax system, or got rid of corporate tax all together. A small fraction of our government spending is created by corporate tax, which only alienates corporations and creates a disparity between economic centers in their need for unlegislated competition.
In accordance with your previous statement, most of these retail jobs are held by the least educated in our society, and whether they are uneducated due to the governments failures or due to their own laziness and lack of willpower is up for discussion.
We are also in agreement about the amorality, or moral neutrality of corporations. As you mentioned, the main costs of a corporation are wages, supplies, or means of production however broadly construed, and taxes. Lowering the tax rate and closing loopholes will actually result in an effective tax raise for many corporations. So why would they return their operations to the U.S. if the reform measures you are seeking only address taxation? My point about the welfare measures the corporation receives on behalf of the taxpayer, e.g. in the form of slave wages, indicates that lowering the tax rate alone is not sufficient.
It is here instructive to take a brief glance at the historical development of the corporation. (Hegel discusses it in an interesting way in The Philosophy of Right, but that is maybe too far afield.) It is a historical fiction to think that corporations emerged in a free market and then only later came under the burden of government regulation and taxation. From the inception, the interests of the corporation were facilitated by government policies. There are countless examples of this, but the most pronounced is perhaps the railroad barons at the end of the nineteenth century. So it is too simple a dichotomy to present the government on one side and the corporation on the other. This is why, for instance, Roosevelt warned against the military-industrial complex, and it is still vividly relevant today in the Middle East.
In light of this, your alleged benefits to a lowered corporate tax rate can be seen as wishful thinking of fallacious supply-side economic theory. Yes, a lower tax rate might raise wages, might boost incentive, attract foreign investment, eradicate poverty, end war, save the polar ice caps from melting, help us colonize the moon, make us beautiful, rid us of all evil, and so forth. I'm not trying to be sarcastic--it's just that these are the perennial and familiar promises of the proponents of free-market economy that have not materialized, even as the system has increasingly favored corporations since the sixties.
The most clear indication that a lowered tax rate is not advisable or desirable is that the rate has in fact incrementally lowered for over the period of the past forty years. Wages have stagnated, while CEO pay has skyrocketed, completely independent of CEO performance.
There is a lot of mystical beliefs about the invisible hands that will guide wealth into the nation and keep business in the U.S. but there are no reasonable historical tendencies to justify this thinking. There are two principal reasons for this:
1. The intimate interactions of corporate interests and governmental policy have created a situation of pronounced inequality, and have effectively redistributed wealth to the top one percent.
2. The corporation, by its very nature, tends toward either implosion or monopoly. The public was compelled to intrude upon the free activity of the corporation because that activity threatened its collective good.
I appreciate your Libertarian views--even though I usually find myself in general disagreement, the Libertarian wing of the Republic party is, in my modest estimation, the only one that is self-consistent and philosophically and economically astute.
But let me for a moment broaden the perspective. I don't judge negatively people who desire profits, and I agree with your implication that to associate the desire for profits with greed is not all that useful. But not all values are moral values. We can still admit that the corporation is essentially amoral and still talk about its ethos, its system of values. I mentioned above that one of these is the fundamental translation of various kinds of activity into exchange value. In the same sense, not all work is labor. The corporate system reinterprets growth, time, work, nature, and even political engagement financially. Corporate taxation is the imperfect result of this necessary translation.
I only have about ten minutes left, so let me just give one easy example of what I mean here. A mining corporation--e.g. the Pebble Mine Company up in Alaska--goes into a place, digs the minerals out of the earth, then moves on when those resources have been exhausted. From the corporations point of view, the land is nothing more than the ultimate dollar amounts that will be made on the market. But land is something different than that--it gets left behind, and has been altered irrevocably. The toxic tailings ponds that every mine leaves behind last forever. (Cf. the spill in Durango right now.) No matter if the tax rate were twice what it is, there is no way to recover that land. The same goes with fracking--the toxins that are pumped into the ground will last millennia.
So it is not as simple as just saying that corporations benefit from infrastructure and public safety--it is that they translate the world, both the human world of activity, work, time, and the natural world as monetary values. Taxation is therefore the only way for the corporation to legitimately participate in the system. It might seem as though I'm changing my fundamental objection--but these latest remarks are bound up with what I've been saying from the start.
Either way, I'm learning a lot from this discussion and look forward to your response.
It is factually undebatable that a lower corporate tax would equate to more jobs being created. Both theoretically and realistically, more money in the hands of the corporation would equate to more incentive for growth.
The biggest argument that you lack to argue against is growth. Growth is the ultimate factor when looking at a corporation as well as any business entity, including a nation itself. All is subjected to growth or to stagnation.
If you close these loopholes, then all corporations have to pay 35% tax rate, which is preposterous. Democratic Socialist nations have a lower tax rate than that. On the other hand, if loopholes are closed, but you evidently lower tax rate with it, then growth will occur. Unless we can compete with the laws of other nations, that many companies invest in, such as China or India, or even Switzerland, (low taxes in Switzerland) then we can attract more.
This nation has safety as well as protection, and risk for investment is not high. In the end, we have 2 trillion in liquid assets overseas that we could bring back by lowering this tax rate. The point of government is not to take profits from people.
I am also looking at this from a political sense, since I do believe that taxes lack constitutionality, and that the government's job is not to be authoritative and levy high taxes upon people, as it does not require this money, since it should not spend much in any sense.
The first is historical. The corporate tax rate has in fact been lowered over the past forty years. During that time, wages have stagnated and wealth has been redistributed from the middle class to a small handful of wealthy individuals. The causes for this redistribution are several, but it is clear that governmental policy favoring the rich has played a major role. For instance, deregulation of the financial sector and international trade agreements (NAFTA and TPP) figure most heavily into these changes.
My objection is, secondly, based on my skepticism regarding the mystical faith in free markets to keep their operations in the U.S. Taxation, as we both have agreed, is only one part of the calculus that determines how a corporation will run itself. To simply lower the rate without closing tax loopholes would constitute a rise in the real amounts corporations pay to the federal government. What reason do we have that they would bring their business back to the U.S. if such a raise in the rate is imminent?
That said, there are a number of more informed ways of going about fixing the corporate tax rate. One is to base it on the disparity between CEO pay and the average worker's wage. (A bill like this is being considered in the California state legislature.) That of course won't fix many of the problems, but it is a step in the right direction.
The broader point is that the taxes a corporation pays is the only way for the public to maintain its interests against those of the corporation. Occasionally, those two interests coincide, but history teaches us that often they do not.
You may believe that you are looking at this issue from a strictly political point of view, but observe the sorts of categories you are deploying when you say that if the government did not spend so much money, it would not have to levy taxes on people. The government represents the public good independent of the drive for profits that sits at the heart of the corporation. Both government and corporations are comprised of people--but from a legal point of view, they are essentially different. The corporation is bound to profit for its survival, against the interests of the collective. As we both agree, that has nothing to do with any moral judgment. The government, on the other hand, depends on other activities for its legitimacy. On a whole, it spends as much as it needs to spend to maintain the interests of the diverse population it represents.