I’m sorry Mr. Jackson but I am for real, Virginia’s corporate income tax is a necessary evil

In the midst of another unnecessary and blatantly harmful government shutdown, Virginia’s very own E.W. Jackson announced a brilliant proposal to ‘grow’ our economy: “do away with the corporate tax in Virginia.” Absolutely brilliant.

Twas at a political stop in Mechanicsville on Thursday that the minister from Chesapeake uttered these unfiltered words: “We [the Republican ticket for governor and lieutenant governor] support reducing the corporate income tax ... from six percent to four percent.” Jackson went on to add, “Now, this is something Ken won’t talk about, not because he’s not willing to, but because he’s only got four years, of course, and he’s term limited out.” Ken Cuccinelli won’t talk about it because it’s an idea founded by the wealthy, paid for by the wealthy, and will overwhelmingly benefit the wealthy.

But, you may argue, eliminating the corporate income tax would benefit Virginians of all socioeconomic stripes (or at least the middle class). If this is the case however, show me the evidence. Individuals on the right of the political spectrum like to assume that corporate income taxes inevitably fall on the consumer, the shareholder, and/or the employees of these corporations, but there is no consensus among economists as to who the tax burden ultimately falls on.

Theoretically, let’s suppose that corporate taxes in Virginia are eliminated. Do you think the corporations would stop prodding their paid-in-full politicians for economic breaks and kickbacks? Of course they wouldn’t, corporations would continue looking down every corner and unearthing every stone possible for the next best tax break. To add insult to injury, corporations would no doubt make the same arguments they make now: if the corporate tax isn’t lowered, we’ll have to ‘downsize’ our workforce and/or move to another location with better tax rates. In other words, the tax avoidance game would continue as before.

To say that corporate taxes create disincentives is no different than saying that our world isn’t perfect. To the progressive mind, government is constituted to allow individuals to pursue their role in the marketplace unmolested AND protect and assist those among us who, through little or no fault of their own, need some form of public assistance. As a minister, Jackson should be especially sensitive to the notion of assistance.

In other words, nothing that government does will ever please all parties. Government has been tasked with the unenviable job of attempting to do just that, however. The corporate income tax is one way that government attempts to give a little bit back to the individuals in our society who have difficulty providing for themselves while allowing the wealthy to play their money-making games. It’s not a perfect answer, but it’s the best that we’ve got.