Corporations are just a straw man. Any profit that a corporation makes is either held as cash, reinvested by the corporation, or returned to the owners of the corporation (i.e. shareholders) as dividends. The profit that's held and reinvested is intended to generate even more profits in the future, which means that eventually, all of a company's profit makes its way back to individual shareholders. Those shareholders, in turn, pay income tax on those dividends. So a corporation's profit is already taxed at the point where it performs the intended purpose of corporate profits--to provide income to the shareholders.
Taxing corporate profits directly at all only accomplishes the following things:
* The profits that are redistributed to shareholders end up being double-taxed; the corporation pays tax on them, and then distributes them to shareholders who pay income tax on them.
* The profits that are reinvested end up being taxed, which reduces the amount that the corporation can reinvest. This directly reduces economic activity, since reinvestment often manifests itself in things like hiring and construction; in other words, increased economic activity. In practice, it might be possible to avoid taxes on these reinvestment activities by accounting for them as expenses and saying, "I guess we didn't make any profit this quarter".
* The profits that are held as cash are taxed, and this isn't actually as big of a deal unless the company is building up a massive stockpile to reinvest later, but in this case it would be fairer to just tax a corporation's cash holdings directly. This would also incentivize corporations to either reinvest their profits or distribute them as dividends, either of which is better for the economy as a whole.
Taxing corporate profits directly at all only accomplishes the following things:
* The profits that are redistributed to shareholders end up being double-taxed; the corporation pays tax on them, and then distributes them to shareholders who pay income tax on them.
* The profits that are reinvested end up being taxed, which reduces the amount that the corporation can reinvest. This directly reduces economic activity, since reinvestment often manifests itself in things like hiring and construction; in other words, increased economic activity. In practice, it might be possible to avoid taxes on these reinvestment activities by accounting for them as expenses and saying, "I guess we didn't make any profit this quarter".
* The profits that are held as cash are taxed, and this isn't actually as big of a deal unless the company is building up a massive stockpile to reinvest later, but in this case it would be fairer to just tax a corporation's cash holdings directly. This would also incentivize corporations to either reinvest their profits or distribute them as dividends, either of which is better for the economy as a whole.