Tuesday, April 26, 2016
Scott Greenberg (Tax Foundation), Corporate Integration: An Important Component of Tax Reform:
Corporate integration would not fix all, or even most of the problems with the U.S. business tax system. The United States has one of the highest statutory corporate tax rates in the world, a counter-productive set of rules regarding overseas income, and a cumbersome system of depreciation and cost recovery. Corporate integration would not solve any of these issues.
However, corporate integration could lead to several important incremental improvements to the current U.S. tax code. Corporate integration would lower the combined tax burden on corporate income, which would increase investment and economic growth the United States. It would eliminate the tax code’s bias in favor of debt over equity, leading to better investment decisions. And it would put corporate investment on par with non-corporate investment, leading to a more efficient allocation of capital.