Profits and taxes

When folks like Ron Paul go around saying we should abolish the IRS and the personal income tax, they're met with derision as folks cluck "how ever would we fund the government?" I'm always amazed at the ignorance this response shows--we funded the government just fine before 1913, when a personal income tax was still unconstitutional. But perhaps some headlines that don't get much attention might reinforce the point:

Corporate profits receive a lot of media attention, but what receives considerably less attention are the corporate taxes paid on corporate profits. Do a Google search for "Exxon profits" and you'll get about 8,000 hits. Now try "Exxon taxes" and you'll get a little more than 300 hits. That's a ratio of about 33 to 1.

I'm pretty sure that Exxon's tax payment in 2007 of $30 billion (that's $30,000,000,000) is a record, exceeding the $28 billion it paid last year. By the way, Exxon pays taxes at a rate of 41% on its taxable income!

In other words, just one corporation (Exxon Mobil) pays as much in taxes ($27 billion) annually as the entire bottom 50% of individual taxpayers, which is 65,000,000 people!

There are those who argue corporations shouldn't be taxed much, since they're the engines of the economy. I'm not one of those people. Corporations benefit even more than individuals from the social protections of the rule of law, and it's appropriate they support the administrative and judicial apparatus that make their functioning environment possible. It's when corporate and personal taxes go to support direct welfare payments and personal services that we have gone from the realm of the "common good" to that of the "plunder your neighbor" approach to governing.

If government stuck to its Constitutional mandates instead of trying to mother all of us from cradle to grave, we could both abolish personal income taxes and ensure corporate taxes remained economically reasonable. The question is whether, as a society, we're willing to take our hands out of each others' wallets.