Paul Soglin, reading my post called The corporate goose, does not like my suggestion that income should be taxed when it finally reaches someone who can spend it. The context for my comment was the double taxation inherent in the corporate income tax. I don't think it makes sense to tax profit at the corporate level and tax it again when it reaches shareholders.
One solution to this is to eliminate or greatly reduce taxation of dividends and capital gains. This is the route that Congress took in the Jobs and Growth Tax Relief Reconciliation Act of 2003. (I preferred the day when legislative proposals didn't have brand names.)
This is better than complete double taxation but it's not the route I would take. I am not a fan of picking and choosing when it comes to taxation. Whether I earn my income from working for someone else or from long term investment, I ought to be taxed at the same rate (although the latter income needs to be indexed).
Paul thinks that my idea (tax the money when it reaches the shareholders) would mean "that the poorest consumer and wage earner will ultimately pay the tax, resulting in little progressivity."
But that's precisely what it won't do. Much of the corporate income tax is actually borne by labor and consumers. He cites a DOR study that says this is a little less than half which may or may not be so. The point is that much of it is not paid by the plutocrats.
But with my idea, it all is or the savings are passed on to laborers and consumers who will generally pay a lower tax rate and benefit from the additional income or savings. Corporations cannot buy yachts or sip Dom on the Cote d' Azur. The point is to make money for the shareholders and, at some point, they must take it into income. Tax it then but, of course, tax it as little as possible.
We don't want to kill that corporate goose.