A New View of the Corporate Income Tax

I really liked this quote:

One of the least well-known aspects of tax policy-making is the distribution table, which is produced by the Joint Committee on Taxation, a Congressional committee, for every major tax bill. The tables show how the legislation affects taxpayers at different income levels. It is a generally understood, if unstated, rule that tax cuts should be evenly distributed in percentage terms while tax increases should primarily fall on the well to do.

The article, though, is about the tax incidence of the corporate income tax:

While economists still believe that the bulk of corporate income taxes is paid by the owners of capital, in recent years they have come to believe that workers ultimately pay much of the tax in the form of lower wages. This results from lower capital investment due to a higher cost of capital, which reduces productivity and hence wages, and because capital investment moves to other countries where corporate income taxes are lower.  

We can see the tax incidence by income distribution in the table below:

Raising the corporate income tax hurts low income people more according to this new methodology (recently adopted by the powers that be in Washington).  Lowering the tax might make economic sense but not necessarily political sense.  And a different methodology will lead to a different distribution.  The more we know, the less we know.......
A New View of the Corporate Income Tax - NYTimes.com