Editorial: Mr. Nixon should veto the corporate welfare tax-cut bill ASAP : Stltoday

Editorial: Mr. Nixon should veto the corporate welfare tax-cut bill ASAP : Stltoday

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Result: The owners of a pass-through corporation eventually would be paying a Missouri income tax rate of 3.25 percent on their income; in some cases, the rate would be as low as 3.125 percent. The people who clean the office toilets will be paying 5.5 percent.

Even as the Legislature is bending over backward to give a break to pass-through companies, Congress has begun to realize that such firms have an unfair advantage over C-corporations that have to pay the 35 percent federal rate. With tax shelters, credits and other forms of legal tax evasion, few companies actually pay as much as the 35 percent rate, but it’s the thought that counts.

Pass-through owners argue that taxing their corporate income, and then turning around and taxing their personal income, amounts to double taxation. It does. That’s fair.

Corporations create multiple public costs that the individual taxes of their owners don’t begin to pay for. Like the rest of us, they’re protected by the most expensive military on earth. Their employees are educated in public schools. Their goods are shipped on public highways. Laws are enforced for them. Nearly all of the state and federal civil court systems exist to litigate their disputes. It goes on.

It simply makes no sense that they get a free (or cheaper) ride on income taxes. In Citizens United v. FEC, the Supreme Court ruled that corporations are people when it comes to funding elections. They ought to be people when it comes to paying taxes, too.