Taxing <i>profits</i> (as opposed to revenue, value add, capital gains..) is the ultimate quixotic temptation for politicians.<p>On paper, it is a fantastic tax. Google, Apple, FB, Amazon... all the new economy winners are very <i>profit</i>able, 20% - 30% margins & fast growth are <i>expected</i> (and priced into market caps).<p>They're so profitable that money is just piling up, atm. They can't usefully invest it all. This means you can tax their profits without affecting the real economy. There's nothing google is doing that it couldn't do if they had to pay $10bn (25%-30%) as a tax on profits.<p>OTOH, unprofitable companies (eg Tesla), would have trouble paying extra taxes. It'd need to come out of investments in production capacity, R&D, etc. They wouldn't have to pay.<p>Corporate income tax is just a sensible idea, on the face of it. Unprofitable? Don't pay. Profitable? Pay. Minimum economic disruption.<p>But in practice... across many times and places... it's proved very hard to make a corporate tax scheme work.<p>Tax policy complexity. Accounting complexity. Multiple jurisdictions. The looping cascade of company ownership, partial ownership, contractual relationships, making up the legal "structure" of a google or amazon.<p>It all adds up to a reality wherein politicans cannot make a law that says 25% tax.. and have that mean something similar to what it sounds like.<p>This is a pill very few politicans or voters can swallow. Of course we can! We're legislators. We make laws. We have police, and tax authorities. Google finance said google made $40.42bn. The rate is 25%. Gives us $10.1bn.<p>Empirically, they generally can't. Changing things to enable corporate tax would require <i>massive</i>, difficult legal/bureaucratic reforms. You would need to consider insanely difficult changes, like heavy handed restrictions on a company's ability to own other companies, and the types of legal entities that can own legal entities. You'd need new accounting standards. The bureaucratic guts of the economic machine.