When the tax reform issue comes up, Dems should expand on the concept of corporations are people.

[Jim Lane]

9. Under current law, most corporations do owe separate taxes.

This is a feature of the tax system that's sometimes criticized. The corporation makes a profit and pays taxes on that. Then, with what's left, it makes a distribution to its owners (the shareholders), and they pay taxes on what they receive. It's been attacked as double taxation.

Of course, when I write that the corporation "pays" taxes, that's shorthand for the theoretical tax rate that's on the books. How much is actually paid is a different question.

A few corporations are set up as Subchapter S corporations. They pay no taxes, but their net income is imputed to their owners as individual income, whether or not there's an actual distribution. That's a fairer treatment, and would be even more so if the individual tax rates were restored to the progressivity they once had.