Why America should stop taxing corporations — and start seizing their stock

The case for a sovereign wealth fund

The case for a sovereign wealth fund.
(Image credit: Ikon Images / Alamy Stock Photo)

Economist Dean Baker has an elegant and radical solution to the problem of corporate tax reform: Scrap the corporate income tax entirely, and require that every corporation turn over 25 to 30 percent of their stock to the government.

When you own a stock, the company pays you a regular dividend out of its profits. When the company or anyone else buys the stock, you get paid for the purchase. With Baker's idea, those dividends and payouts become a source of government revenue. But the proposal is also a clever backdoor way for the U.S. federal government to embrace a far more ambitious idea: Namely, a sovereign wealth fund.

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Jeff Spross

Jeff Spross was the economics and business correspondent at TheWeek.com. He was previously a reporter at ThinkProgress.