TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Wednesday, January 2, 2013

Sanchirico: Taxing Public Companies

Chris Sanchirico (Pennsylvania), New Ways to Think About a Tax on Public Companies:

Suppose someone proposed a special tax on businesses that make their ownership shares publicly available in affordable, easy-to-sell units. Such an idea would probably generate a lot of push-back. Efficiency advocates might complain that it taxed the very attributes that make equity markets efficient. Progressivity advocates might object on the grounds that it taxed those who have no alternative to publicly available investment opportunities.

In fact we already have such a tax. We call it the corporate income tax.

In what sense is the corporate tax a special levy on being publicly traded? And what do we know about the policy implications of such a charge?

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