We should lower the tax on corporations. That would make the United States more attractive to American and foreign multinationals. We should then raise taxes on the people who receive the benefits of profits. The economists suggest cutting the corporate rate to 26 percent and increasing the capital gains rate to 28 percent; dividends would be taxed as ordinary income. Eliminating unwarranted business tax breaks would generate extra revenue.
No matter what the corporate tax rate is, corporations will find a way around it. Thus, it might make sense to make it harder for executives to siphon money out of the business into their own pocket. So a combination of lowering corporate rates and raising marginal tax rates could make sense to me, and is somewhat in line with what Samuelson writes. As for dividends/capital gains tax increases, some will howl that this will kill investment, which is cute, until you remember that the average stock is held for 22 seconds, and that 90% of what Wall Street calls investment is just speculation.
