Why Technology Companies Should Not Pay Taxes

Though it is counter intuitive, consumers actually are better off when corporations do not pay any taxes at all.

They collect taxes on behalf of the taxing authority, but that's it. Taxes are a cost of doing business, like any other, so some other stakeholder winds up paying. The only issue is which stakeholders those are.

A tax requires that the wallet of some human being gets lighter; the study of exactly whose purse it will be is the study of tax incidence.

With respect to the incidence of corporation tax, we have known since 1899 (when Seligman first pointed it out) that the company itself does not ultimately carry that burden. In theory it's some mixture of the customers (who end up with higher prices), the workers (who get lower wages) or the shareholders (who see lower returns).

But there is an argument to be made that it is the workers and the shareholders who, in the end, take the hit.

So to the extent that a person actually cares about economic growth, this matters. To be sure, some people do not apparently actually care about growth, but economic growth is what allows people to earn a living, and supports all government spending. So economic growth really does matter. 

A some level, taxes are necessary. But some taxes are harmful because they depress the growth that supports all jobs. Corporate taxation is one of those harmful taxes.