Give Me A Good Reason Why Corporations Should Be Taxed

One of the reasons corporations were created was to encourage investment. The shell allowed investors to invest without the then concomitant risk of loss greater than the value of the investment.

Limitation of liability encouraged investment, which was thought to be a societal good. The fiction that a corporation is a person is normative as it seeks to change behavior.

Tax laws are also normative in effect, if not purpose. Corporations spend enormous amounts of time and money complying with tax laws. They spend more time planning their businesses because of tax laws. They make decisions, in part, based on tax consequences. Should they?

A corporation does not pay taxes. It passes them on to its customers. If, starting tomorrow, corporations stopped paying taxes, there would, after transition, be no net tax increase to individuals. To compete, the corporations would lower prices, a benefit to their customers. Government would presumably increase taxes to individuals, which would be paid out of the price savings they were enjoying. There would be a net wash in cost to people and income to the government. In fact, by taking corporations out of the taxing chain, they would save the compliance costs mentioned above, money that could be passed on to their customers, reinvested in the economy, or both. Either results in a net gain to people. Corporations would conduct their business without having to worry about tax consequences, instead deciding on true economic factors, again, presumably a good thing.

The other big gain is that currently trendy word, transparence. People would have a better idea of what they were actually being taxed versus the present system that hides taxes in prices.

So, I ask is there a good reason for corporations to pay taxes?