In addition to expanding the income tax so that it became a broad tax on most households, the government increased the corporate tax and excise taxes, created a 5percentt "victory tax" to be repaid in a tax credit after the war, and raised to 90percentt what was called an excess profits tax on companies.
Wealthy corporate shareholders seek greater profits for themselves, so they offer lavish bounties to senior corporate executives for increasing the corporate share price.
This cost savings results in greater corporate profits, which increases the corporate share price, which in turn enriches the shareholders and executives.
Please note as well: We are not talking about increasing the corporate tax which causes firms to migrate abroad; indeed, the reform most favored by economists would reduce the US corporate rate thereby raising share value and attracting foreign business here.
The additional revenue was to be derived from Collins' proposed tax package, which included increasing the income tax on individuals making more than $15,000 annually, extending the sales tax to cover services such as auto repair and dry cleaning, and increasing the corporate licensing tax.
Amendments added by Democrats would increase the minimum corporate tax to $500 and allow certain businesses to make an alternative payment rather than file taxes.
To keep tax revenue steady in this case, of course, you'd need to actually increase the overall corporate tax rate — which doesn't seem all that politically salable, either.
For example, California is considering legislation that would increase the state corporate tax rate for companies with high pay ratios and would decrease the rate for those with low ratios.
This would increase the chances that corporate incompetence will be corrected, corporate malfeasance found out and corporate self-dealing, in the form of inflated pay, countermanded.Back to the drawing boardThere are objections to the Bainbridge-Henderson plan.
