Monday, October 1, 2012
The Committee for a Responsible Federal Budget has released a policy paper on corporate tax reform (Reforming the Corporate Tax Code) along with an interactive Corporate Tax Reform Calculator that allows users to design their own corporate tax reform plan.
The policy paper argues that with the highest statutory corporate tax rates in the developed world, the United States is badly in need of corporate tax reform. However, any reforms must be done in a fiscally responsible way. Specifically, the paper discusses the following:
- Why rate lowering tax reform is important to promote growth, reduce compliance costs, and boost international competitiveness.
- How corporate tax reform can be done in a fiscally responsible manner by broadening the tax base to reduce distortions and inequities in the current tax code.
- What approach several prominent proposals -- including from the Simpson-Bowles Commission, President Obama, House Budget Committee Chairman Dave Camp, and Senators Ron Wyden and Dan Coats -- would take in reforming the corporate tax code and business taxes more generally.
The Corporate Tax Reform Calculator gives users a hands-on opportunity to see how various reforms discussed in the paper could play out. Users can see how their choices would affect the corporate tax rate and can also set a revenue target that could reduce or increase future deficits and debt -- but it's important that any choices be fiscally responsible.