Why Romney’s right that ‘companies are people’

| August 14 2011
Christopher Cook

Liberals (why do we keep calling them that?—they’re statists!) love big government but hate big business. They seem to forget that businesses are made up of people: the management, the workers, the shareholders . . . and even the customers.

What we, as a society, do to businesses—we’re doing that to people. We’re not doing it to buildings. The buildings don’t care.

We’re not doing it to balance sheets. They don’t feel a thing.

Everything we do to business, whether it be the right thing or the wrong thing, we are doing to people.

James Pethokoukis wrote a piece a couple of days ago looking at this fact, with the catalyst being Mitt Romney’s comments on this subject. It’s short, so check out the whole thing.

Rather, I am pretty sure he was trying to say that corporations are made up of people, but not in a Soylent Green sort of way. Rather they are comprised of workers generating goods and services for customers. And when you punish corporations, you punish workers and shareholders and customers. A few additional points:

1) Here an interesting bit from an OECD paper on taxes and economic growth

Corporate taxes are found to be most harmful for growth, followed by personal income taxes, and then consumption taxes. …  A second option is to reform corporate taxes, as they influence productivity in several ways. Evidence in this study suggests that lowering statutory corporate tax rates can lead to particularly large productivity gains in firms that are dynamic and profitable, i.e. those that can make the largest contribution to GDP growth. It also appears that corporate taxes adversely influence productivity in all firms except in young and small firms since these firms are often not very profitable.  … Lower corporate and labour taxes may also encourage inbound foreign direct investment, which has been found to increase productivity of resident firms. In addition, multinational enterprises are attracted by tax systems that are stable and predictable, and which are administered in an efficient and transparent manner.

2) And here is economist Greg Mankiw addressing the topic in his popular economics textbook . . . read the whole thing

I’d like to point out the OECD point that “[c]orporate taxes are found to be most harmful for growth.” I have been of the opinion, and saying for a while, that we should eliminate all corporate taxes. Very little of federal revenue (approx 5%) comes from corporate taxes, but the benefits to growth would be astonishing. Corporations from across the globe would relocate here. Unemployment would be as low as we wanted it to be.

But this will not happen as long as the left is out there playing class warfare games.

 

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