Tuesday, August 27, 2013

How about a zero corporate tax rate? Except for "businesses" we don't like...

Larry Kudlow (in this video), along with the Heritage Foundation's Curtis Dubay, attempts to make a case for taxing non-profit universities. Kudlow suggests that universities that act like businesses should be taxed like businesses. Dubay thinks donations specifically targeted to education should maintain their tax-exempt status, but that their business pursuits---patents, ticketed concerts, restaurants, sporting events, etc.---should be looked at (i.e., taxed) like businesses.

Kudlow levers Milton Friedman's thought that colleges should operate for profit; that they needed a different kind of model---and adds that they should be taxed accordingly. But the thing is Milton Friedman, Kudlow himself (ironically), the Heritage Foundation (ironically), and little old me have all argued for the repeal of the corporate income tax.

While, in this knee-jerk-reaction-of-a-post, I may be missing some logic related to taxing heavily subsidized universities (I welcome your feedback), at first blush I---unlike Kudlow and the Heritage Foundation---can't get behind the taxing of the business pursuits of universities when I've previously argued for the elimination of taxes on businesses altogether.

And if you think I'm overly sympathetic to the pursuits of big universities, read The Fat Can Eat No Lean - Or - Too Much Pain to Pass Up...

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