re: What's the argument against raising the corporate tax rate?

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Corporations don't pay taxes. Neve have paid one penny of tax and never will. Unlike you and me, they are blessed with someone to pay their taxes for them: (1) their customers who pay those taxes in the form of higher prices, and (2) their employees who are forced to accept lower wages and reduced benefits.

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This is wrong. Why not the reverse? Employees don’t pay income taxes; they just charge higher wages to their employer. Both of these are wrong for the same reason: no one can dictate the price of a product, service or labor.

Corporations that do pay taxes compete with partnerships that don’t. If a corporation and a competing partnership are both clearing $1,000,000 in income the corporation pays maybe $200,000 in income taxes, and if it distributes the $800,000 to shareholders who average a 30% marginal tax rate, then those shareholders pay $240,000 in income taxes. So $440,000 is taxed away by the feds.

The partnership makes the same $1,000,000 distributes it (or not) and if its shareholders pay the same 30% then only $300,000 is taxed away. Now the corporation has an advantage in that if it does not distribute the $800,000 after-tax earnings then it can keep using that $800,000, while the partnership would only have $700,000 to use.

That’s the situation now. If you raise corporate taxes the partnership advantages will far outweigh the corporate advantages for a lot of companies, and there would be a flood of reorganizations. These would cause a lot of disadvantage to deal making and business investment.