[jogjayr]

I don't actually have an opinion either way because I don't understand the tax system well enough. But I'm curious, why do you think:

a) money pulled out of business for personal consumption isn't driving the economy? - that's how other businesses make money

b) personal consumption isn't already taxed? That's what sales tax does right?

c) money pulled out of businesses isn't used to finance other businesses? eg. I live off dividends from my index funds while I bootstrap my startup.

[cortesoft]

First, I am not alone in thinking we should get rid of the corporate income tax. Most economists of all stripes agree (there are some good explanations here: https://www.theatlantic.com/business/archive/2010/10/why-we-...)

To answer your points:

a) Yes, consumption drives the economy, but consumption does not 'multiply' like investment spending does. It would be much better for the economy for someone to buy a tractor than a speedboat, for example; the tractor is used to create more wealth, while the speedboat does not produce anything. We want to incentivize the investment type spending.

b) Yes personal consumption is already taxed. We would have to change the way and rate we tax to offset lost income, and do it in a way that is not regressive. If we get rid of corporate income tax, we can raise capital gains and income taxes on wealthy people without overly penalizing them.

c) Yes, you can obviously use money earned from one company to invest in another. A good tax structure would recognize that and encourage it.

I think all of this comes down to realizing that taxes do two things, raise revenue and drive behavior. We want to make sure the behaviors we cause are the ones we want as a society, while at the same time raising enough revenue to do the things government needs to do.