"OK, maybe it shouldn't be this way. Maybe we should change the system. My own suggested change would be to simply abolish corporation tax and tax dividends and capital gains on shares at normal income tax rates. Done and dusted ... but that's an amazingly unpopular suggestion, if I'm honest."
I agree that all profits should be treated equally, but I think the problem with removing corporation tax is that it breaks the tax system.
Wealth is generated, wealth moves around, and ends up somewhere. Gov't (theoretically) says to all things that can have wealth "OK everybody, give us x% of your net generated wealth".
A corporation can have wealth. If you don't tax their net generated wealth (profits not disbursed) then you have a bunch of untaxed generated wealth. It's all very well saying that eventually it'll be taxed because it'll eventually go somewhere, but I'd argue that the growth of Apple's cash pile says otherwise. A better way, I think, would be to tax undisbursed profit and then give the money back when it's disbursed.
Biting the hand that feeds IT
