Tax implications of liquidating a corporation
Thanks to everyone who commented on my last two posts, especially the many people who disagreed with me. I was wrong to say there was “no case” for the tax bill. Several people brought up problems with the article saying CEOs say they will just give the money back to shareholders, most notably that giving money back to shareholders may stimulate the economy in other ways. Seriously, guys, I admit I don’t know as much about economics as some of you, but I am working off of a poll of the country’s best economists who came down pretty heavily on the side of this not significantly increasing growth. I stand by my claim that I care less about economic growth than about where the money goes.Aside from all of the minor provisions which can be good or bad, the case for slashing corporate rates is that they’re more distortionary and less efficient than other forms of taxation. If you want to tell me that it would, your job isn’t to explain Economics 101 theories to me even louder, it’s to explain how the country’s best economists are getting it wrong. That includes caring less about distortionary taxation, deadweight loss, and all those other concepts.
The fairest thing I can think of is to compare this use of 0 billion to just spreading 0 billion evenly among all the government’s existing priorities.Half of the budget is entitlement programs, and 32% of those go to the poorest quintile, so they would get an extra billion. But it’s hard to come up with remotely plausible numbers in which the poor and working-class are better off with the tax bill than without it.I think the assumptions I plugged in were overly generous: the bill won’t really increase growth 1%, and although poor people have 3% of income they get much less than 3% of economic gains.Imagine the government went 0 billion into debt to build a giant bronze statue of George Washington.Should we be debating whether running up the deficit is really that bad?