The Corner

Two Postscripts on Business Taxes

First: In response to that column, an aide to Senator Rob Portman (R., Ohio) calls to note that Portman would prefer to combine a reform of the corporate tax code with a reform of taxes for individuals. I didn’t say otherwise, just noted that he was more “willing” than most of his Republican colleagues to reform the corporate code by itself, which I think is an accurate characterization. I’m happy, though, to clarify his view.

As the column explains, neither Portman’s preferred option nor his fallback one seems very promising. A better idea is to move in the direction of a business consumption tax, or to try a smaller-scale but important reform that ends the tax code’s biases in favor of corporate debt and against business investment.

Second: A few folks on Twitter have asked whether the business consumption tax is dangerously close to a value-added tax (VAT). The main conservative objection to a VAT has been that it would replace or supplement a highly visible tax (the income tax) with a hidden one, and therefore make it easier for the federal government to raise revenue. Whatever the merits of that argument (which are disputed), I don’t think it applies to this case. A VAT that doesn’t let businesses deduct the cost of wages is a hidden tax on labor income. The business consumption tax does let them do that. It doesn’t replace the income tax; it would replace the existing taxes on businesses.

(For the same reason, the business consumption tax avoids the chief liberal objection to a VAT: that it’s regressive. Income taxes could be as progressive, or flat, or regressive, as Congress wants them to be.)

Ramesh Ponnuru — Ramesh Ponnuru is a senior editor for National Review, a columnist for Bloomberg View, a visiting fellow at the American Enterprise Institute, and a senior fellow at the National Review Institute.

Most Popular

Politics & Policy

Broward’s Cowards

It is impossible to imagine circumstances under which Broward County sheriff Scott Israel could attempt to perform his duties with the confidence of the public. He should resign immediately, and if, as he promises, he refuses to go quietly, then he should be shown the door by the people he professes to ... Read More
Culture

Courage: The Greatest of Virtues

EDITOR’S NOTE: The following is Jonah Goldberg’s weekly “news”letter, the G-File. Subscribe here to get the G-File delivered to your inbox on Fridays. Dear Reader (Or Listener), As the reporter assigned the job of writing the article about all of Sidney Blumenthal’s friends and supporters told his ... Read More
Immigration

My American Dream

This morning, at 8 a.m., I did something I’ve wanted to do for as long as I can remember: I became an American. I first applied for a visa in early 2011, and since then I have slowly worked my way through the system — first as a visa-holder, then as a permanent resident (green card), and, finally, as a ... Read More
Politics & Policy

CNN’s Shameful Town Hall

CNN recently hosted an anti-gun town hall featuring a number of grieving children and parents from Stoneman Douglas High School in Parkland, Fla., who aimed their ire at the National Rifle Association, politicians peripherally associated with the NRA, and anyone who didn’t say exactly what they wanted to hear. ... Read More
U.S.

The Gun-Control Debate Could Break America

Last night, the nation witnessed what looked a lot like an extended version of the famous “two minutes hate” from George Orwell’s novel 1984. During a CNN town hall on gun control, a furious crowd of Americans jeered at two conservatives, Marco Rubio and Dana Loesch, who stood in defense of the Second ... Read More