Greg Mankiw makes a convincing case for reducing or eliminating the corporate tax rate and increasing the gasoline tax significantly. While all taxes have the ability to distort incentives and shrink the economic pie, Mr. Mankiw's main premise is that corporate taxes are one of the worst offenders, and the individual taxpayers bear much of the burden in the end.  Mr. Mankiw's words:

A cut in the corporate tax as Mr. McCain proposes would initially give a boost to after-tax profits and stock prices, but the results would not end there. A stronger stock market would lead to more capital investment. More investment would lead to greater productivity. Greater productivity would lead to higher wages for workers and lower prices for customers.

Populist critics deride this train of logic as "trickle-down economics." But it is more accurate to call it textbook economics. Students in introductory economics courses learn that the burden of a tax does not necessarily stay where the Congress chooses to put it. That lesson is especially relevant when thinking about the corporate tax.

In theory, I generally agree with much of what Mr. Mankiw says. I think replacing a "bad" tax (corporate) with a "good" tax (gasoline) would help generate economic growth - which is good for everyone. It will also help reduce negative externalities, such as congestion and pollution. Because the two taxes would net to zero, the budget deficit would not increase due to a policy change such as this.  It's not clear to me what (if any) collateral damage this kind of policy would have - only a more rigorous analysis could help determine that - but in theory I could get behind this.

The problem is that theory can only take you so far. Given the way our political system works, this kind of policy has no chance of ever coming to fruition. It's politically a non-starter for both major parties. While some would agree a reduced or eliminated corporate tax is a good idea - increasing the gasoline tax to offset the budget effect would never go through. Never.

Theory is good, but getting some theory into practice is often a very difficult thing to do. Then again, we could just create a totalitarian state and dictate policy to the people - but I think that kind of system comes with its own set of problems.