From my perspective, corporates are “people” only as a legal convenience: they are better thought of as devices that operate inside the economy. The economy takes in labour, land and natural resources; it spits out goods, services and pollution; money, in the form of wages and capital gains, flows around:
Concrete inputs and outputs are easy to tax. Money is abstract, but because wages and capital gains are attached to people, they can easily be taxed. Whereas corporate profits are an abstract thing that exists entirely inside the economy.
I feel like taxing corporations just adds friction to the gears of the economy – wouldn’t it be better to run at full steam and tax the interfaces? As Doug Saunders points out, large corporations are good at avoiding taxes (eg: Ikea and GE pay no taxes). Because corporate taxes are inside the economy, depending on elasticities taxes could ultimately be shifted to any part, including wages and consumer prices. For example, HST is a corporate tax cut, because it reduces the taxes paid between corporations through the supply chain, but it could result in lower prices and more jobs (nobody knows what its long-term impact will be!).
It seems like we should cut corporate taxes with corresponding increases in taxes on land, natural resources, capital gains and pollution. But although corporate taxes may not work very well, they might be more politically viable than other taxes, and are better than no taxes at all – the federal Liberals and Adrian Dix’s BC NDP are both campaigning to raise corporate taxes. And there might be no point in unilaterally cutting corporate taxes lower than other jurisdictions.