A Short History of the Income Tax
One original sin was the separation of the corporate and personal tax, giving lawyers, accountants and the wealthy a chance to game the system.
The other pernicious consequence of the separate corporate and personal income taxes has been a field day for demagogues and the misguided to claim that the rich are not paying their “fair share.” Warren Buffett recently claimed that he had paid only $6.9 million in taxes last year. But Berkshire Hathaway, of which Mr. Buffett owns 30%, paid $5.6 billion in corporate income taxes. Were Berkshire Hathaway a Subchapter S corporation and exempt from corporate income taxes, Mr. Buffett’s personal tax bill would have been 231 times higher, at $1.6 billion.
Should be required reading before any conversations about how we tax income, both personal and corporate.
Actually, as long as we’re mentioning John Steele Gordon, I can’t recommend highly enough his book “Empire of Wealth: The Epic History of American Economic Power”. Here’s a link to it on Amazon: http://www.amazon.com/Empire-Wealth-History-American-Economic/dp/0060505125