President Trump has come out with his proposal regarding corporate taxes. He wants to lower it to 15% while closing all the loopholes. There will be a lot of discussion on both sides on the effectivity of this act. One side will say that it will generate new business and the other will say there is no use to it and it is a payoff to the rich. Neither side will discuss the morality of the act.
Lowering corporate taxes is the only moral choice in this scenario. As it stands right now our corporate taxes are 35-39%. It varies slightly depending on the actual state you are in. The amazing thing about this rate is that when you ask any politician whether they are from the right like Ted Cruz or from the left like Bernie Sanders they will all say the same thing. Corporations do not pay this as it is. They pay an average of 15% to 20%. Some corporations pay lower and some higher depending on how aggressively they are willing to exploit loopholes and the talent of their lawyers and accountants. There is a consensus that if corporation were to actually pay this tax rate which is the highest in the world they would leave or go under. We are in effect operating under laws we expect no one to follow.
Since I am discussing morality it will be useful to first discuss what a law is. A politician will give you one answer, a law student will give you another, and a layman will give you a third. The best description I have found comes from a thinker in the Qin dynasty. A law is a wish. It is the physical incarnation of the ideal society of the lawmaker. In simple terms if you make laws penalizing rape and murder it is because you do not want rape and murder in your society. If you make laws protecting dolphins it is because you want the environment and that animal protected. If you make laws attracting business it is because you want your people employed. The laws you make define the type of society to live in. If you make laws that you expect people to break then you get a society of lawbreakers.
Should be Followed
Ayn Rand got a lot of things wrong in her philosophy but one of the things she got absolutely correct is that the most evil thing you can do is to design laws so people have no choice but to break them. Once you do that you have turned your entire society into criminals and have control over them. Take the tax rate for example. If you have a group of moral companies who paid the 39% as mandated by law and another group of companies who cheated and paid only 15% the companies who made the moral choice would cease to exist. What is worse the officials tasked with enforcing the law would not care as no one expected the law to be followed anyway.
Once you have created your society of lawbreakers then all the power rests in the hands of those who enforce and make the laws as opposed to the citizens. Your success or failure does not depend on the skill of labor or management but on the grace of the officials who choose which laws they would like to enforce. After all the easiest way to actually kill your company would be to enforce the laws that are already there. You have basically institutionalized corruption.
The Moral Choice
Laws should be made with the expectation that they be followed. If you want companies to pay 40% tax then make then declare that they will pay 40% tax. If you want them to pay 100% tax then make a law that compels them to do it. If your system does anything else then it must be changed.