Conflation Conflict, Continued (Unfortunately)
In the comments to my original "Conflation" post, Stephan Kinsella challenged P.M. Lawrence:
BTW I assume you would be for removing all corporate income tax, since it is based on the entity fiction? This is yet another way the state *harms* corporations.
Lawrence responded that the argument was
disingenuous; by itself, it would make things worse - by itself. Over and over, we have pointed out that selectively removing some burdens while leaving others can make things worse, even if all burdens should be removed. It's like scraping barnacles off one side of a ship; not only would the ship not speed up much, the side that still had barnacles would start going back, and because the ship would go in circles it would make less headway overall.
This is true of a wide range of distorted situations; if you have 10 uncorrelated distortions, the distance from optimality will be proportional to the 10, but if you remove 5 of them that are all correlated one way, the remaining 5 will all be correlated the other way and the distance from optimality will be proportional to 5 squared, i.e. 25. The actual suboptimality will be proportional to the square root of that, but of course gains and losses to individuals within that aggregate will be proportional to the distance from optimality - there will be serious gainers and losers, from a smaller aggregate loss.
What is more, Kevin Carson has already pointed out that corporate income tax tends to make resources stay inside corporations rather than trickling down to natural persons. This strengthens those artificial entities over natural persons.
In a subsequent comment he added, by way of clarification:
I can see Kevin Carson's point about getting rid of it, but with Australia's franked dividend approach I think it would be a low priority to get rid of it here. That is, I think it should be eliminated at about the same time as personal income tax, which I feel should be phased out by turning it into a SAYE scheme from which people could draw down amounts above a cap. That cap would fall to zero at an ever reducing cut off age matched to an ever increasing age benefit entitlement age (here, those are paid from consolidated revenue). The best way of transitioning from corporate tax probably involves compounding it for issues of shares to an endowment fund, which should be decentralised from the state to charitable services as rapidly as possible. At or after that time, corporations themselves should be restructured as partnerships, with bearer shares to convert former shareholders into de facto limited liability sleeping or silent partners (unless and until they came out to vote or something), and with the managers the active unlimited liability partners (with a debt to pay off to buy themselves in, and novated on retirement to cut their liability after that). Then let firms shake out as events dictate.Finally, Kinsella commented:
Glad to know you are for the state imposing the corporate income tax and for the double-taxation of shareholders it implies. IF you hate shareholders, might as well want them punished, eh?
From all this, Kinsella distilled a post at Lew Rockwell Blog in which he 1) ignored Lawrence's direct contradiction of Kinsella's claim that identified the left-libertarian position as pro-corporate income tax; 2) selectively edited the material to conceal the fact that Lawrence in fact aims at an end-state without the corporate income tax, but wants to phase in the abolition and coordinate it with other tax reductions to minimize destabilizing effects; 3) edited out Lawrence's acknowledgement that I favored abolition and that Lawrence's position differed from mine.
On top of all this, he published the material under the highly misleading title "Left-Libertarians: Pro-Corporate Tax"--suggesting that PML was inconsistent or hypocritical, or was inadvertently giving away the real, esoteric Left-Libertarian doctrine that we hide from the Gentiles.
P.M. Lawrence is a polymath with a wide-ranging body of knowledge on history and economics, and in particular an MBA with some direct knowledge of the inside world of corporate management. His critical intelligence and erudition have always been enthusiastically welcomed here. PML has never made any pretense of being a left-libertarian, left-Rothbardian, or mutualist, or anything else but an interested reader who likes to point out error (wherever he finds it) and offer helpful information.
He is not guilty of any hypocrisy whatsoever, orof any inconsistency with his stated principles. And to suggest that his remarks reflect a pro-corporate tax position on the libertarian left, or amount to some sort of defining doctrinal statement on behalf of left-libertarianism, is utterly misleading and disingenuous.
Such a "gotcha" approach--and in a venue which does not allow reader comments, no less--suggests that Kinsella has exhausted his supply of legitimate arguments.
Update. Although no doubt we fail to see eye to eye on what exactly I found objectionable in his previous post, Stephan Kinsella has obligingly informed his readers of those objections.