The history of the corporate tax

How did the "classical corporate income tax" - in which corporations are taxed separately from their owners - emerge? Some contend that it was designed to counter the growth of corporate power, while others respond that it was necessary to aid in the collection of the individual income tax from shareholders. These are more disagreements over timing rather than substance though. The classical corporate income tax emerged in four stages or "acts" and each of these two explanations predominated at different times in the early development of the corporate income tax. In the United States, these acts could each be described in one or two words: (1) Revenue, (2) Shielding, (3) Avoidance, and (4) Regulation/Mitigation. This four-stage description helps to explain the U.S. system and contextualize why corporate income taxation developed differently in other countries, such as New Zealand, and the United Kingdom.