It’s a relatively common sentiment among the economically literate to advocate for the complete abolition of corporate income taxes. I sympathize with and understand why some hold this view. Many papers like the classic Atkinson and Stiglitz (1976),
What it is obvious is that any tax on corporate income shall be neutral between equity and debt. It shall be on operational profits. The current subsidy on debt is un ambiguously wrong.
What it is obvious is that any tax on corporate income shall be neutral between equity and debt. It shall be on operational profits. The current subsidy on debt is un ambiguously wrong.