Conceptual Problems of the Corporate Tax
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The book analyses fundamental theoretical controversies related to the concept and the justification of corporate taxation.
Why This Book?
What do we really know about corporate tax? Who does it affect and why? Does it somehow impact shareholders, as originally intended? Is it consistent with the fundamental principles governing the taxation of individuals?
This book, based on the author’s PhD dissertation, explores these questions via a thorough analysis of the Swiss and US corporate tax systems, considering legal, economic and philosophical aspects.
To begin, the book analyses the conceptual difficulties in defining a corporate taxpayer. In particular, it demonstrates that an optimal definition of a taxable corporation does not exist. An entity that is taxed as a corporation in a certain country may be considered a flow-through vehicle in another jurisdiction. This entity classification mismatch creates infamous cross-border complications, giving rise to hybrid entities that may lead to either double taxation or the creation of “homeless income”.
This impossibility to define a corporate taxpayer in a satisfactory manner relates to deeper corporate tax problems, which are explored further in this book. It guides the reader through the historical development of corporate taxation, with specific emphasis on the concepts of economic double taxation and the ability to pay. The author also presents contemporary economic and philosophical approaches to corporate taxation. For instance, the research on the economic incidence of corporate tax shows that corporations shift their tax burdens onto various groups of persons that cannot always be precisely identified. Can a tax be considered legitimate when its bearers cannot be clearly established? Analysing fundamental taxation principles, this book argues that the mechanisms of contemporary corporate tax are very far away from producing their initially intended effect, i.e. affecting mainly – or only – shareholders.
This publication was subjected to a single-blind peer review by international academic experts in the field and topic area.
Conceptual Problems of the Corporate Tax – Swiss-US Comparative Analysis
DOI: https://doi.org/10.59403/1gkq6fr
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Chapter 1: General Introduction
DOI: https://doi.org/10.59403/1gkq6fr
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Chapter 2: Opening Comments Part 1
DOI: https://doi.org/10.59403/1gkq6fr
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Chapter 3: Swiss Entity Classification for Tax Purposes
DOI: https://doi.org/10.59403/1gkq6fr
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Chapter 4: US Entity Classification for Tax Purposes
DOI: https://doi.org/10.59403/1gkq6fr
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Chapter 5: Closing Comments on Part 1
DOI: https://doi.org/10.59403/1gkq6fr
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Chapter 6: Economic Double Taxation and Its Role in Corporate Tax
DOI: https://doi.org/10.59403/1gkq6fr
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Chapter 7: Ability to Pay in Corporate Taxation
DOI: https://doi.org/10.59403/1gkq6fr
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Chapter 8: Conclusions
DOI: https://doi.org/10.59403/1gkq6fr
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Reviewed by James R. Repetti &William J. Kenealy, S.J. Professor of Law, Boston College Law School.
"Conceptual Problems of the Corporate Tax by Giedre Lideikyte Huber is a well-written and thoughtful comparative analysis of the Swiss and U.S. corporate tax systems.
Part One of the book provides an in-depth analysis of the approaches followed by Switzerland and the United States in determining which entities should be subject to the corporate tax. It extensively discusses Switzerland’s approach, which focuses on the entity’s commercial law classification to determine when the corporate tax should apply. It then contrasts the Swiss approach to the U.S. approach, which generally ignores the commercial classification of an entity and instead makes somewhat arbitrary distinctions. These arbitrary distinctions trace their origins back to a historical multi-factored test that sought to determine whether the entity possessed a majority of corporate characteristics.
Part Two of the book then explores the justifications for imposing or not imposing a separate tax on corporate income. It describes the historical context in which the corporate double tax arose—the need for increased revenues and the interest of corporate managers in having an excuse to retain corporate earnings. It then discusses the difficulties in justifying the corporate double tax apart from its historical context. It carefully analyzes the many problems in applying the traditional ability-to-pay principle to the corporate tax. In addition, it succinctly and skillfully reviews the literature about the incidence of the corporate tax and the many uncertainties raised by that literature.
The book’s thorough comparison and critique of the Swiss and U.S. systems provide new insights about the issues pertaining to our corporate double tax. I highly recommend this excellent book to all who are interested in the development and future of the corporate tax."
