Income tax rates are progressively in the majority of countries, with higher earners paying a larger amount of their income to the government than smaller earners. Why isn’t this done to support small businesses? Large companies do just fine with higher tax rates but it’s small businesses that keep the economy alive so they should get a lower tax rate to support them shouldn’t they? Or is there an underlying economic principle that doesn’t allow this to work.
P.s sorry about the yap
In: Economics
Because of capitalism. Who has the money makes the rules. Why would the corporation lobby for a bad position for themselves?
Because larger companies will just divide themselves up into smaller entities owned by the same people.
People can’t divide themselves, so you can have progressive tax on individuals
People and corporations are very different. Firstly you can make an arbitrary number of corporations of any size. A taxi corporation for example may be structured as one big corporation or each cab may be its own corporation or even every shift if you want. So with progressive tax you can just structure the corporations to be very small so they avoid any taxes. But you can not split a person int many small people each with their own tax filing.
In addition to this people have a minimum expenses that is needed to survive. You need food, shelter, healthcare, etc. It would be really bad to tax people for their basic needs. However corporations can get by with very little income. You just need enough to pay people to do the paperwork for the company which might not be much at all. And if the company make less then this the solution is not to reduce the taxes or give benefits but rather to shut down the company. You can not do this with people.
Because they are the ones who pay the politicians to write the unfair tax laws that favor them; simple as that.
We live in an oligarchy where the large corporations who benefit write the laws and choose the officials who “regulate” their industry. The tax code is but a suggestion to these parasites on society.
The problem of a company splitting itself into a set of smaller company owned by a holding company would be trivial to detect and with the right laws wouldn’t defeat a progressive tax system.
Corporations are different. A corporation can cut itself up into 5 pieces and spread out the profits so that it makes a lower tax bracket. You can’t separate yourself into 5 little people that split your income to get a lower tax bracket. So the answer is because the Corporations would cheat in ways people can’t possibly do
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