Breitbart: The Death of the American Corporation

By Justin Haskins, Breitbart,

The traditional American corporation has been a fixture in the U.S. economy for generations. Corporations allow entrepreneurs to shield themselves from liability, spread ownership out to an unlimited number of shareholders, and more easily raise funds for large-scale business investments.

While many modern politicians and pundits have spent copious time denouncing the evils of corporate America, the reality is that without the legal protections and financial opportunities provided by corporations, the United States would never have developed into the economic superpower it is today.

Despite its many advantages, the American corporate business model is slowly and painfully dying, and with it, a tremendous potential for future economic growth. According to a recent study by William McBride at the Tax Foundation, the United States loses roughly 60,000 corporations every year, and about 1 million corporations have been lost since the mid-1980s. According to the study, the number of corporations in the United States is at its lowest point in 40 years.

As a result of the declining number of corporations, only 60 percent of U.S. business profits now come from this type of business structure, a relatively low figure compared to many of the other successful economic nations of the world.

The reasons behind the decline of the American corporation are not difficult to discover. The United States continues to have the industrialized world’s highest corporate income tax rate, beating out numerous notorious high-tax nations like Belgium and France. Additionally, the U.S. tax code provides many incentives for those starting businesses or restructuring businesses to stay away from traditional corporations, also known as “C corporations.” For instance, C corporations are subject to multiple layers of taxation, which means the profits of the corporation are taxed, the shareholders’ profits are taxed, and all of the employees working for the corporation pay personal income taxes, as well.

[Published by Breitbart, read more here]