I don't know how to have a conversation if you can't change the subject. Nonetheless,here are my thoughts on the corporate income tax: One of the hoariest of tax chestnuts is that the corporate income tax is "unfair double taxation." This statement is accepted as tax policy gospel without any thought given to whether it is true or not. Yet it drives the preferential rate on dividends and capital gains. The statement simply represents a misunderstanding of the nature of the corporate income tax. However, to appreciate that misunderstanding one needs to begin with the individual income tax. The only possible justification for a tax that is as complex and intrusive as the individual income tax (really net income tax) is its fairness. Thus the primary objective of any income tax provision should be to promote fairness. Most of all fairness means taxing individuals alike, and any provision that exempts certain types of income from tax entirely, e.g. municipal bond interest or earnings from Roth IRA's, or partially, social security benefits, or taxes income at different rates, dividends and capital gains, is unfair. By the same token, an entrepreneur's net income from business activities should be taxed like other individual income. As a consequence of that decision, the entrepreneur's competitors need to be subject to the same tax rate to prevent an unfair competitive advantage. For example, charities are subject to income tax on their business income unrelated to their charitable purposes (UBTI). For a similar reason, for profit corporations have to pay a corporate income tax to prevent unfair competition. Dividends paid from the corporation are taxed again at the individual level because they are just like other types of individual income. The individual and corporate income taxes serve different purposes. This is no different than taxing all business income alike, whether the purchaser of the service or product was deductible because it was for business purposes or non-deductible because it was for personal purposes. If the income tax laws wanted to discourage business owners and entrepreneurs, it would impose the corporate tax as soon as the owner set up a limited liability vehicle or added another owner. Thankfully that has not been the case and closely-held entities have been able to avoid the corporate income tax by being taxed as a "pass-through entity" in many cases by organizing as a partnership or an "S corporation." All family or employee (for example, a law firm, although owned by its partners is referred to as "employee owned " for convenience) owned entities should be able to qualify as a pass-through entity, and Congress should repeal all existing obstacles to such qualification. The tax law should not discourage entrepreneurs from adopting the business structure necessary to compete with publicly-held companies. The corporate income tax is not a "double tax." Rather it is a fairness tax to prevent publicly-held companies from enjoying a tax advantage over family and employee owned companies. Moreover, family and employee owned companies do not pay the corporate tax so as to permit them to adopt a structure that can compete with public companies without taking away the tax treatment that the individual owner would have if the business was directly operated by the owner. As has been oft-noted, borrowed capital is treated differently from equity for corporate income tax purposes. Because interest payments are deductible, some argue dividends should be deductible. The opposite is true: interest on corporate borrowings invested in the business should not be deductible to the corporation. The corporation should not be able to reduce its income by choosing how to finance its capital needs; the decision should be income tax neutral. On the other hand, interest paid to third parties on business borrowings by family and employee owned businesses should be deductible. Borrowing from a third party is often not by choice, and accordingly the interest paid must be considered a legitimate expense (rather than a return on equity) in determining "net" income. Individuals and corporations who borrow to purchase non-business investments, as under current law, should be able to deduct the interest against investment income. The changes I propose above would be unfair unless every dime of revenue generated was used to reduce the tax rate to be imposed on all types of income for both corporate and individual tax purposes. Treating corporate business interest as non-deductible has a substantially different effect when the tax rate is 20% and not 35%. Moreover, telling all workers, entrepreneurs, corporations and investors how much lower the 35% rate can go from each income tax change made for fairness reasons helps build a constituency for change. Conversely, an opponent to change, or someone seeking a future tax break, will face a much harder task if the tax break is translated into everyone's tax rate. This would restore accountability to the income tax system much more than "pay as you go" where tax breaks are paid for by finding the narrowest possible constituency and hitting them hard. On the other hand, if Lee Sheppard of Tax Notes is right that "taxing the wealthy" is tax policy, then I suppose so is "taxing the unpopular." I would appreciate hearing from those many who have a different opinion.