system
Given the following post, respond as if you're commenting on Reddit:
human
Why exactly do economists dislike corporate taxes?

...and what would they propose to replace in order to raise revenues for the government? Would this amount be significantly more than purely corporate taxes? Why are they not simply taxed on gross income? How is it considered 'inefficient'?

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I have heard of a consumption tax, would this be something like Value Added Tax?
gpt
The reason economists don't like corporation tax is that it distorts investment in the economy. The very simple example is that if you imagine a firm has a profitable venture (π) with probability (p) of being successful and cost c to attempt, then the firm will invest if:

E(πp)>c

Adding a tax distorts the left hand side of the equation and reduces the potential gains of the project being successful, and therefore stops firms from investing in otherwise profitable ventures. The reason this is bad is that all investment (savings) is for future consumption, and thus distorting investment (savings) function reduces consumption in the long run. It's also why a progressive consumption tax is popular among economists, because it causes the least distortion in behavior. Other popular taxes are pigovian taxes (ones that fix an externality) such as carbon taxes. Finally, another popular tax is a Land Value Tax.