This works, too. Though it brings up the question of whether the dividend rate should be different between dividends paid to US taxpayers and dividends paid to others.
Sure, eventually. But imagine you’re a doctor and you set up yourself a corporation with no tax rate. Then you’d do everything you could to have all your life expenses flow through the corporation to use tax free money. And you’d only pay yourself the minimum feasible out of it to minimize all taxes paid. As much as possible a corporation would just become a tax shield that you’d keep assets in to avoid taxes, in my naive tax accounting view.
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Let’s not lose sight of the original purpose for corporations. Limited liability.
That’s a really big Bennie. They don’t need tax benefits to secure their future. Let me ask this: would you trade off no taxes on corps for open liability?
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They pass the tax on to others.
yeah, I don’t know how we as a society deal with double taxation
I think we’re “dealing with it” right now. It’s slightly more expensive for firms to raise capital so in theory growth is ever so slightly slower. In return we get all the vast benefits of being able to invest with strangers in nice bite sized chunks.
There are firm setups where it’s truly a pass through and you don’t get double taxed, but then you get to deal with a K1 at year end.
There’s an entire discussion to be had about tax dodges that exist and how few of them should exist after you get through the personal standard deduction. If you’re going to discuss changing tax rates to whatever, make sure you’ve got a plan to wipe the vast, vast majority of those dodges out of existence. Otherwise, you’re largely swapping one flawed system for another and still creating advantages and disadvantages based on whether you’ve got money to find them or not.
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This, and then capital gains and dividends taxed as ordinary income.
Although as I approach retirement in the near-medium-term, I’m starting to warm to keeping the low rate on qualified dividends 
If dividends are taxed at the same rate as wages, fine. If they’re not (if it’s the same as right now), I’m pretty sure this would just induce corporations to pay dividends.
Preferential tax treatment of capital gains and qualified dividend payments are two huge tax giveaways to the ultra wealthy but both pale in comparison to step up in basis tax dodges.
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How about wages paid to US workers? I mean don’t the owners get enough breaks already?
I say remove the individual federal income tax. Instead, apply a “payroll” tax on the business and have the business deal with the tax implications and let the average Joe not worry about April 15th.
And you assess a different tax rate for non-management workers, management workers, and executives.
We already have a payroll tax – Social Security and Medicare. Economists are nearly universal in their opinion that the economic impact of the tax falls on workers in the form of lower wages.
When we collect the tax at the individual level, it’s possible to make the tax progressive. IMO, that’s a good thing. A payroll tax doesn’t recognize total family income and family size, it’s a flat rate tax with no standard deduction. I don’t like that.
These are at the individual level.
I’m talking about the individual won’t see anything in terms of “fed tax withheld” on their pay stub. Nor is there tracking to “this person paid this much in fed taxes”.
lol recursion
The tracking doesn’t matter. If the tax is x% of the total of all wages, every employer understands that is also x% of each individual’s wages. If they outsource that job (for example) they no longer pay the wages and they no longer pay the additional x%. Knowing that is enough to make the economic shift happen.
(Have you ever done/seen a CBA on automating or outsourcing a job? If so, how would this tax be handled any differently that FICA?)
edit: It occurred to me that we might be talking about two different things. I’m thinking about the so-called “employer share” of FICA, not the employee share.
What are you asking here? What about wages?
I could be mistaken, but I believe he’s missing some red font.
That makes even less sense (to me) than my initial interpretation.