Problems with Gross Receipts Taxes: An Expert’s View

January 16, 2007

If you haven’t seen it already, be sure to check out our excellent new podcast interview with Prof. John Mikesell on the economic and administrative drawbacks of gross receipts taxes. You can listen to the full interview here, or read the transcripts here instead.

Although the main topic of the conversation was gross receipts taxes, here’s an interesting aside on the likely fate of embattled state corporate income taxes in coming decades:

Mikesell: Corporate income taxes are dying a deserved and slow death, and that’s a tax that is disappearing, and deserves to disappear. It’s a conduit of tax burdens to individuals, and states ought to just forget about the conduit and tax individuals.

Tax Foundation: Well, it’s unfortunate that a tax that seems to be suffering such a slow death is costing both the economy and businesses so much to comply with.

Mikesell: Oh, yes. That’s right, and to figure out ways to reduce the burden. State legislatures are complicit in the process, trying to figure out ways to tax somebody else’s corporation while they protect their own corporation. The direct approach of just getting rid of the corporate income tax at the state level is the direction that makes the most sense. (Full transcript here.)

Read more from Prof. Mikesell at his faculty webpage here. You can also pick up the latest edition of his well-known textbook, Fiscal Administration, here. For our own recent study on the economic flaws of gross receipts taxes, click here.


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