The United States generally imposes two levels of federal income tax on corporate profits. The first level taxes income to the corporation; the second level taxes dividends to the shareholders. Academics and policymakers have long considered this double tax to be “unusual, unfair, and inefficient.” Legislators from both political parties have proposed integration of the corporate and individual income taxes on many occasions, but the proposals consistently fail. Prior academic analyses have struggled to explain the failure of integration. This paper demonstrates how certain managers, shareholders, and collateral interests rationally favor certain integration proposals and oppose other integration proposals, while other managers, shareholders, and collateral interests rationally adopt contrary positions. The substantial heterogeneity of interests among managers, shareholders, and collateral interests generally accounts for the stubborn persistence of the double tax. Close examination of the lobbying positions taken by managers, shareholders, and collateral interests in response to the Bush Administration’s dividend-exclusion proposal establishes that the heterogeneity of interests directly shapes the legislative process and definitely affects legislative outcomes. The argument presented here implies that, as a political matter, the corporate double tax is much more entrenched than most prior analyses assume.
Liberties and Markets
Liberties and Markets argues both that libertarianism based on consequentialist moral reasoning is internally inconsistent and that alternative “deontological libertarianisms” face different problems than those emphasized by Jonathan Wolff. Libertarians, I claim, can respond convincingly to most of the arguments advanced against them by Wolff. But these responses are not adequate to defend the libertarian position; for any arguments that could demonstrate the existence of moral rights that would be sufficient to underpin libertarian economic ideals would also imply the existence of rights inconsistent with those ideals.
Libertarianism, Utility and Economic Competition
Libertarianism is defined both by its foundations and by the institutions to which it typically is said to give rise. In this paper it is argued that while a system of economic competition can be defended on consequentialist grounds, such arguments are not available to deontological libertarians. Thus it is concluded that deontological libertarians cannot provide a foundation for the type of economic system they favour.