Corporations with plenty of capital stock don't really need to attract any, so given the double taxation of dividends and the opportunity to provide above the tax line lifestyles for their fair haired boys, the motivation is to plump up the expense side of the ledger, thus reducing corporate income to as close to zero as feasible without hurting the share price. When Joe carpenter travels or eats out, his expenses come out of after income tax savings, not a pre-income tax expense account. If the tax system were consumption instead of income oriented this gaping hole between tax treatment of executive and labor lifestyle would be eliminated. Income taxes inhibit capital planning, i.e. they inherently presume that there will always be income in the next year, completely shunting the possibility of spending less in one tax period in preparation for (possible) hard times to come. Income tax takes the money in advance, thereby reducing (or eliminating) the capital cushion for the working classes. When hard times hit, labor classes must borrow. Income taxes thereby foster indebtedness. Demanding the cash in advance of the individual's voluntary conversion of capital (brass in pocket) into goods and services (spending), is the moral equivalent of being held up at gunpoint – it’s anything but voluntary. Despite widespread preference for consumption instead of income tax, we still have government redefining what you can deduct every year. Loopholes and market distorting tax credits subvert natural economic forces - evidence our insane stimulation of the corn ethanol market. Corn ethanol has a net negative energy output, from seed to gas tank, it has diverted agricultural resources from feed stock and other agricultural products, increasing the cost of food prices worldwide. Score another point for government stimulated economic insanity. Income tax is not fair to all, it's riddled with loopholes, that the wealthy leverage through skilled technicians (lawyers and accountants), while working class people miss the coupons in the loopholes because they can't afford to hire outside expertise. Income tax is thereby the principal mechanism for expanding the gap between capital and labor classes. Politicians look like they’re wringing their hands over what to do about the expanding wealth gap, when there are examples like Anguilla's pure consumption tax policy - in an economy where the job market is dominated by relatively low paying hospitality jobs (hotel, restaurant) they've made huge improvements in citizens' average wealth over the last three decades. That increased wealth provides robustness (like automotive shock absorbers), when the economy hits a pothole, savings smooth out the ride. Without grassroots capital stocks, those bumps hit much harder. Here in the 'free' U.S., government condemns earned income, while granting year after year preferential treatment to passive earnings (rents, royalties, capital gains, etc.). Could there possibly be a more efficient mechanism for inhibiting the conversion of income into savings and thereby the transition from working class to financial security? The U.S. has neither embraced capitalism nor socialism – instead, it has institutionalized class warfare and enlisted the IRS as its fingermen. Wake up and smell the cherry blossoms.