Replacing Corporate Taxes With The Payroll Tax

Ronald Reagan increased the payroll tax in the 1980's.  It is a regressive tax because the tax rate decreases as income rises.  The payroll tax accounts for about one third of federal tax revenues.  The regressive payroll tax replaces the income lost from the corporate tax which used to be a major source of federal tax revenue.  We would have not budget problems if corporations contributed the same share of federal tax revenue that they paid before the policy changes made in the Reagan administration. 

The major argument that has been made in defense of corporate tax cuts is that they encourage investment.  There has been no change in the rate of corporate investment since the tax cuts.  The primary beneficiaries of the tax cuts have been corporate executives and shareholders.