Quote:
Originally Posted by mrkajz44
I'd say the main reason there is not a 0% corporate tax is this would allow for indefinite tax deferral if the money is never taken out of the company. So if a company reinvests 80% of its profits every year and pays out 20% in dividends, only 20% of the company's profits will ever be taxed. The 80% could be deferred forever*
*Well, maybe not forever, but a long, long time
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Pretty much this. A reasonable corporate tax encourages the company to invest in it's employees and dividends instead of hoarding excessive amounts of cash.