Welcome to DU!
The truly grassroots left-of-center political community where regular people, not algorithms, drive the discussions and set the standards.
Join the community:
Create a free account
Support DU (and get rid of ads!):
Become a Star Member
Latest Breaking News
General Discussion
The DU Lounge
All Forums
Issue Forums
Culture Forums
Alliance Forums
Region Forums
Support Forums
Help & Search
Corporate Tax Reform: Be Careful What You Wish For (Jared Bernstein)
Corporate Tax Reform: Be Careful What You Wish For
<...>
Last I checked, we were collecting around 1.3% of GDP in revenue from the corporate sector. That’s low both in our own historical terms (the average has been about 2% over the past few decades) and especially in international terms, despite the fact that we have a higher statutory rate. And it’s not just the recession depressing corp revenues, though that’s part of it, because corporate profitability is once again soaring.
This tells you two things. First, a lot of companies take advantage of the breaks in the code and second, getting to a revenue-neutral 28% will mean taking away a lot of those goodies.
Some of the biggies are accelerated depreciation, interest deductibility, the ability to pass corporate capital gains over to the individual side of the code (where it gets favorable treatment), and a bunch of international loopholes, like deferral—the ability to avoid US taxation by holding multinational profits overseas.
I don’t think today’s release will go into much detail on specifics but the implication is clear: if those who have been clamoring for a lower corporate rate are serious, they need to step up and support these loophole closures.
- more -
http://jaredbernsteinblog.com/corporate-tax-reform-be-careful-what-you-wish-for/
<...>
Last I checked, we were collecting around 1.3% of GDP in revenue from the corporate sector. That’s low both in our own historical terms (the average has been about 2% over the past few decades) and especially in international terms, despite the fact that we have a higher statutory rate. And it’s not just the recession depressing corp revenues, though that’s part of it, because corporate profitability is once again soaring.
This tells you two things. First, a lot of companies take advantage of the breaks in the code and second, getting to a revenue-neutral 28% will mean taking away a lot of those goodies.
Some of the biggies are accelerated depreciation, interest deductibility, the ability to pass corporate capital gains over to the individual side of the code (where it gets favorable treatment), and a bunch of international loopholes, like deferral—the ability to avoid US taxation by holding multinational profits overseas.
I don’t think today’s release will go into much detail on specifics but the implication is clear: if those who have been clamoring for a lower corporate rate are serious, they need to step up and support these loophole closures.
- more -
http://jaredbernsteinblog.com/corporate-tax-reform-be-careful-what-you-wish-for/
3 replies
= new reply since forum marked as read
= new reply since forum marked as read
"Do you honestly think that those loopholes will be closed? My bet is that the corporate tax rate will be lowered, while the loopholes remain open...."
...unless it's lowered to zero, it would represent no change to these companies:
30 Major Corporations Paid No Income Taxes In The Last Three Years, While Making $160 Billion
http://thinkprogress.org/economy/2011/11/03/360185/30-corporations-no-taxes/
I mean, only about three industries are paying above 28 percent, and most are paying less than 20 percent.
