Analysis of Corporate Taxation and Policy: A Comprehensive Report

This report analyzes the article 'Corporate Income Tax: What Is It Good For?' by Mark Bowler-Smith, focusing on the merits of corporate income tax within the Australian context. It outlines the author's discussion of corporate tax viability, addressing its alignment with the canons of taxation, particularly efficiency, simplicity, and equity. The report examines the article's arguments, including the application of Adam Smith's principles of law enforcement and welfare maximization, and assesses the corporate tax structure's compliance with these principles. It explores the equity principle, emphasizing the equitable distribution of the tax burden, and the efficiency principle, focusing on optimal resource allocation and revenue generation. The report also critiques the simplicity of the tax structure. The report presents arguments for and against corporate tax, concluding with a call for reform and restructuring to address existing complexities and ensure the tax system's effectiveness. The report also includes the marking rubric and examiner's comments.

Running head: BUSINESS TAXATION AND POLICY
Business Taxation and Policy
Name of the Student
Name of the University
Author Note

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Introduction
Corporate tax depicts of structure of direct taxation where the corporations as well as
similar legal entities are impressed with taxation with respect to their capital or income. The
revenue that has been raised through corporate taxation is a vital source of income for a
particular country. This form of taxation is beneficial as it shifts the burden of paying the
taxes open the corporations lifting it from the individuals acting behind the corporations. The
article ' Corporate income tax: what is it good for?’ written by Mark Bowler-Smith has been
an important source of assessing the corporate income tax. This article presents discussion
over the viability of corporate income tax. In this article, the author has addressed the concept
of corporate income tax and assess merits incorporation on the light of the canons of taxation.
This article has strived to analyse the corporate taxation and whether all the features that are
required to be present in a tax structure has been followed. This article has assess this
structure of taxation in relation to public good. The main aim of this article was to consider
the tax structure under the factors of efficiency, simplicity and equitability. Whether any
reform or restructure of this form is required for the purpose of ensuring the benefits of the
economy. This paper would analyse the article in question. It will strive to provide an outline
of the article and would address the accomplishments of the author in serving his purpose
with the article.
Discussion
The article in discussion has been concerned with the assessment of the merits of the
corporate income tax. The author has started his discussion in this article by quoting Adam
Smith regarding the enforcement of laws and the theories behind the same. The author has
submitted that the law enforcement and implementation is required to made with the chief

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objective of maximum welfare of the individual. In this aspect the incorporation of the
corporate income tax has been introduced and has been strived to assessed under its social
welfare objective as well as welfare maximization objective. The corporate income tax
structure has been argued under the standard policy principles relating to taxation. This article
has suggested economic welfare to be addressed with the tax structure and implementation of
tax laws as well as policies. The merits of the corporate taxation is required to have certain
qualities to be regarded as a good tax. These qualities include efficiency, equity as well as
simplicity. The corporate tax structure is required to comply with the welfare as well as
upliftment of the society for the purpose of being regarded as a beneficial tax structure. In
discussing this form of taxation, under the light of equity, efficiency and simplicity, the
author has quoted Kaplow. The analysis under this article was to assess the contribution
relating to the corporate income tax in ensuring the principles of taxation. Whether the
implementation of corporate income tax is viable and has been affecting the society as well as
the economy in a positive way1.
The chief motive behind this article was to to arrive at an understanding and a conceptual
knowledge regarding the most prevalent form of direct taxation that has been imposed upon
corporations. In this paper the author has enumerated the corporate Income Tax as the most
popular form of direct taxation that is involved in relation to corporations. The chief intention
of the author behind this article was to assess this system of taxation both theoretically as
well as practically. Unlike the personal income tax, the corporate income tax has been o
recent development, which is relatively recent than that of the personal income tax. The
corporate taxation has been presenting anomalies and discrepancies is creating confusion
within the society. In this respect, the author of this article has quoted Gammie. In his
opinion, the corporate taxation has not been supported by any unambiguous theoretical basis.
1 Bowler-Smith, Mark. "Corporate income tax: what is it good for." Austl. Tax F. 30 (2015): 865.

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The structure of this form of taxation as well as the jurisdictional basis of the same has also
suffered from uncertainty. The famous of this form of taxation has failed to provide for a
legal framework that would have resolved the discrepancies and uncertainties arising out of
this structure of taxation. There is also an unclear picture regarding the basis upon which the
amount that needs to be claimed as well as the basis for claiming the tax in this form of
taxation. However, in this article the author has right to gather the ideas together to provide a
better understanding of this form of taxation. The author in this article has tried to adopt a
framework that will address and discuss the core principles relating to taxation and
implement the same to make a judgement regarding this form of taxation2.
The taxation as well as system of transfer affects the lives of the Australians. The taxation
system of a country is one of the main sources of income of the nation. This income has a
direct impact upon the society. The tax structure of a country need to ensure that interest of
the population of the country as well as the development of the economy of the country. The
idea of corporate taxation has been implemented to ensure an adequate income of the country
via taxation. However, the benefits of this form of taxation ensuring the welfare of the society
needs to be analysed and assessed on the light of the compliance of this form of taxation with
respect to the principles of a tax structure. The main objective of this article is to provide an
assessment of the corporate tax structure in ensuring the basic requirements relating to
taxation. This basic requirements include equity, efficiency as well as simplicity. This article
has addressed the several tax principles. It has presented the equity principle and discuss the
corporate tax structure under this principle. It has also included a discussion on efficiency of
the corporate income tax. The simplicity aspect of the tax structure has also been addressed
and analyse in this article and on the basis of this principle the corporate tax structure has
been judged3.
2 Bowler-Smith, Mark. "Corporate income tax: what is it good for." Austl. Tax F. 30 (2015): 865.
3 ibid

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The first aspect of a tax structure that needs to be addressed for the purpose of assessing
the corporate tax structure on the basis of such principle is the equity principle of taxation.
According to the equity principle relating to taxation, the economic burden relating to
taxation needs to be spread evenly over the society. The assessment of the same has been
carried out on the basis of both theoretical as well as practical dimension. With respect to the
theoretical basis, it can be stated that a tax structure depicts an operative distributive standard.
This needs to be assessed as further contention that what amount of wealth the taxpayer needs
to sacrifice or make payment of under a particular tax structure. Under this principle, the
rightness as well as fairness of a tax structure will be assessed for the purpose of arriving at a
conclusion regarding the compliance of this principle by the corporate tax structure. The roots
of this principle of taxation lies in the apportionment of the burden of taxation in an equitable
manner open all the elements of the society. This requires the taxation system to be non-
discriminatory that is the individuals in a society needs to be treated in equal manner while
imposing them with taxation. However, this non-discriminatory principle does not require the
imposition of same rate of taxation up in all the individuals of a society. For the purpose of
imposing the taxation on the basis of equity, tax need to be imposed in relation to the social
as well as economic status of the individuals of a society. As per the practical dimension, the
system of taxation needs to considered target of the incident of taxation. It needs to assess
whether the individual open whom the taxation has been imposed has the capability of
bearing that burden4.
Another aspect of an adequate tax structure is the efficiency of the tax structure. This
aspect of a tax structure required the tax structure to ensure optimal allocation pertaining to
the resources of production within the economy in entirety. This requires the tax structure to
be allocated in such a manner that it strives to ensure the maximum amount of revenue being
4 Bowler-Smith, Mark. "Corporate income tax: what is it good for." Austl. Tax F. 30 (2015): 865.

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raised through the same. The efficiency factor of a tax structure requires an immense balance
being created between the burden that has been imposed upon the individual and the
distribution of the tax in a way to ensure the maximum revenue being raised. This can be
achieved via imposing the highest level of taxation upon the corporate conglomerates who
has been making an enormous amount of profits. The aspect of the deductibility of the debt
interest in case of corporate taxation can be seen as an inadequacy as in the tax structure. This
is because such an arrangement may disrupt the operations of the corporations5.
Another aspect of the system of taxation that has been covered under this article is the
simplicity of the tax structure. A tax structure needs to be simple enough for the purpose of
the understandability of the same by the individuals upon whom it has been imposed. The
concept of simplicity underlying in a tax structure requires the taxation to be comprehensive
and ensure conformity. It needs to be easy to calculate and the wastage of resources needs to
be minimised in collecting as well as playing the same. The tax structure needs to be easy to
enforce and requires a less complicated formalities as well as technicalities. This article has
criticized the corporate tax structure on the basis of ensuring simplicity of the system. This is
because the tax structure has been inadequate in ensuring the simplicity aspect of taxation
owing to its complicated structure6.
Although in certain aspects the article has provide strong arguments for supporting the
corporate income tax, but it has also pointed out certain failures on the part of the tax
structure. This article has presented the corporate tax structure as a flexible as well as cost
effective system that is efficient in its implementation. It has also ensure that the goals of the
society that a tax structure is required to achieve. Moreover, the maximum income that the
individuals of a nation achieves goes to the corporate conglomerates and this ensures a high
level of revenue to be raised from the imposition of high rate of taxes upon these entities. The
5 Bowler-Smith, Mark. "Corporate income tax: what is it good for." Austl. Tax F. 30 (2015): 865.
6 ibid

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author has also presented certain arguments against the corporate tax structure. In his opinion,
corporate tax structure has no future when it has been assessed with respect to long term. This
is because of the complications that have been existing in the current form of this tax
structure. The author has contended for a reform to be brought about bring a restructuring to
this form of taxation7.
Conclusion
In this article, the author has presented and argument both in favour as well as against the
corporate tax structure. It has implemented several principles of taxation for the purpose of
arriving at a solution regarding the effectiveness of the corporate income taxation. For the
purpose of assessing the same the author has made an extensive research in the works of
several academics as well as economics for the purpose of bringing up thorough
understanding of the topic. The author has presented a separate arguments both supporting as
well as contradicting the principles of taxation being complied with by the corporate income
tax structure. Although the article has been apt in its accomplishments of the topic it has been
discussing, however the inclusions of additional exemplary illustrations would have been
more appropriate. Moreover, apart from the factors of equity, efficiency and simplicity, are
certain other factors that are included in the canons of taxation which this article has failed to
address. However, the article can be said to have been successful in inculcating a clear
understanding of the topic of corporate taxation and its merits and demerits.
7 Bowler-Smith, Mark. "Corporate income tax: what is it good for." Austl. Tax F. 30 (2015): 865.

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Bibliography
Bowler-Smith, Mark. "Corporate income tax: what is it good for." Austl. Tax F. 30 (2015):
865.