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This might be a question better-suited for Economics StackExchange, but I figured I'd try my luck here first.

In the U.S. we have a bracketed tax system for personal income tax, which serves to increase the percentage tax you pay on dollars that are earned past a certain amount.

Why, then, do we have a flat corporate tax rate? Why not have a bracketed system that places a higher percentage tax on revenue dollars earned past a certain amount?

In my eyes, this may bring two benefits:

  • It serves to increase the amount of tax going to the federal government, which can be used to fund various social programs.
  • It prevents companies from growing excessively big – at some point, a company will stop expanding because the effective tax rate on new dollars would be too high. This would allow smaller competitors to take some of that lost market, and serve to actually increase the effectiveness of a capitalistic structure.

Has this ever been proposed by a U.S. lawmaker, and if not, what are the large problems with this that prevent it from becoming politically or economically viable?