Reply to post: Re: Why you can't abolish corporate tax

Google UK coughs up £130m back taxes. Is it enough?

Anonymous Coward
Anonymous Coward

Re: Why you can't abolish corporate tax

Why not just treat dividend payments and capital gains as a form of increase in assets, therefore a form of income? The limited liability shield also makes it more likely owners take risks, start companies that will hopefully soon hire their first employees, and so on - which is not something we should discourage - so keep corporation tax, but simplify it. Charge corporation tax on the amounts paid out (including for acquisitions as well as in dividends) not the amount held in a company for re-investment in new technologies, new products, new jobs? That would address your point about US taxes on dividends from a US company - every shareholder, regardless of domicile, would pay the relevant local taxes on that income, and the company itself (in your example) would pay US taxes on the payout. If companies want to use shares for acquisitions, fine - but treat it as a form of payout too (after all, the acquisition is designed to reward someone, isn't it?)

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