(Why) Do We Need Corporate Taxation?
In theory, tax competition endangers corporate taxation. Evidence is mixed. Corporate tax rates have declined from the 1980s in OECD and non-OECD countries. Extrapolating this trend, corporate tax rates would be zero by mid-century. But corporate tax as a percentage of total tax has been steady over this time period. This could be explained by decreasing exemptions, but increasing incorporation could also contribute.
In theory there are more direct taxes than corporate income taxes, so corporate taxation ought not be missed, if it is indeed disappearing. For example, pollution or congestion caused by a corporation's business is not dependent on profits, and could be taxed directly.
But corporate tax may also serve as a backstop for other taxation of income or labor. If corporate income tax is substantially less than other income taxation, more income would be directed through corporations.