Skip to content

House Tax Bill Yanks State/Local Tax Deduction from Individuals But Not from Corporations

Congress doesn’t just think corporations are people; it thinks corporations are better than people. Rep. Kristi Noem “worked hours” to produce tax cuts that are permanent for corporations but temporary for workers and families. Big businesses (including the Trump empire) get their new lower 25% pass-through tax rate on their millions now, but mom-and-pop shops don’t get a lower 9% rate on their first $75K until 2022.

And in one more dig at non-businesspeople, see Section 1303 of the House bill, “Repeal of Deduction for Certain Taxes Not Paid or Accrued in a Trade or Business.” Individuals no longer get to state and local taxes, but businesses do.

I understand the legal argument that corporations are people. But can someone explain to me the moral or practical reasoning that justifies giving corporations tax favors that real, natural people do not (or soon will not) enjoy? What do corporations do that entitles them to be treated better than their workers and customers, the people who make their existence possible?

10 Comments

  1. o

    Cory, I don’t understand the legal argument that corporations are people. I just don’t.

  2. Roger Elgersma

    Not a level playing field.

  3. John

    o; it’s a legal fiction inadvertently created in a turn of a phrase in a court case. The camel of judicial activism got its nose under the tent and silliness ensues.
    http://www.saturdayeveningpost.com/2016/06/02/history/post-perspective/century-old-question-corporations-people.html
    Extending equal protection rights to corporations is one thing – but corporations are far short of being people. Try jailing one; or drafting one; etc.

    Check out the “few questions” (2:33min). Consider incorporating yourself if this tax travesty passes. https://www.youtube.com/watch?v=PDB1ZJjJnPA

  4. Nick Nemec

    Do small unincorporated businesses still get to deduct property tax on property used by the business?

  5. Vance Feyereisen

    Question– If corporations are people then does that mean people are corporations?

    The argument that corporations are people is a talking point akin to trickle down economics. The difference being that the corporation argument has been enshrined in law with some pretty partisan and twisted thinking.

  6. mike from iowa

    korporations are people is part of the judicial activism the right embodies but accuse Dems of being the activists on the Scotus.

  7. O, I understand that the legal argument exists. I understand that Republicans accept it as their justification for all manner of corporate protections. I don’t understand how they can jump from that understanding to a favoring of corporations.

  8. Nick, I don’t think you have to be incorporated. The exception in Sec 1303 reads, “other than taxes which are paid or accrued in carrying on a trade or business or an activity described in section 212).” Farmers carrying on a business should still qualify to deduct their property taxes.

  9. o

    John, I understand the premise of a legal fiction and the need for one to create certain legal pathways. I even understand that the creation of a corporation’s “personhood” creates an avenue for legal recourse (but wouldn’t have that existed without “personhood?”). I don’t understand its necessity or its expansion.

    Originally, corporations also had a requirement to prove establishment for the public good to be granted charter. Now that we give more rights, we remove the responsibility of decency; in fact, endow a premium responsibility of corporate-survival upon those acting as agents of that corporation.

    What I don’t understand is the transitive property of allowing the owners the same legal protections when acting through their corporations – freedom of religion, speech . . . In that EVERY action of a corporation is the action of an individual (or group), why create an artificial shield for those who make the decisions?

    To me, the right’s stance on corporate personhood trivializes their stance on pre-natal personhood. The moral arguments they make for pre-natal personhood and the sanctity of that life fly in the face of preserving and expanding corporations’ claim of legal rights to be shared with living humans. Pick a lane.

Comments are closed.