[Politics_CurrentEvents_Group] What Obama Should Say About Corporate Tax Reform

What President Obama Should Say About Corporate Tax Reform

New Report from Citizens for Tax Justice:
President Obama Should Follow Reagan's Example by Raising Taxes on Corporations
The Obama administration has recently been signaling interest in a reform of the corporate income tax that would be revenue-neutral, meaning it would not reduce or increase the deficit. In other words, the administration says it wants to close unwarranted and expensive corporate tax loopholes, but use all the revenue that raises to reduce the corporate tax rate.

Revenue-neutrality is the wrong goal. Corporate tax reform could involve some small reduction in the corporate tax rate, but overall corporate tax reform should be revenue-positive, so that it can reduce the budget deficit.

This report explains several reasons why corporate tax reform should be revenue-positive, rather than revenue-neutral.

—Despite what corporate CEO's and many politicians claim, U.S. corporate taxes are already lower than the corporate taxes imposed by the countries that we compete with.

—Surveys show that most Americans want large corporations to pay more, not less, in taxes.

—The arguments lobbyists make to try to justify reducing U.S. corporate taxes — arguments related to "competitiveness" and alleged "double-taxation" of corporate income — don't add up.

—The last major corporate tax reform, which was enacted under President Ronald Reagan at a time when corporate loopholes were out of control, as they are again today, resulted in a 34 percent net corporate tax increase. To do any less today, with our huge long-term deficit problem, simply does not make sense.

The appendix at the end of this paper describes some of the most significant breaks and loopholes that should be removed from the corporate income tax.

Read the Report

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