Paul L. Caron

Monday, June 20, 2016

AEI & TPC:  A New Proposal For Corporate Tax Reform

American Enterprise Institute & Tax Policy Center, A New Proposal for Corporate Tax Reform:

Eric Toder & Alan D. Viard, A Proposal to Reform the Taxation of Corporate Income:

  • Reduce corporate tax rate to 15 percent
  • Tax at ordinary rates dividends and marked-to-market capital gains of taxable American shareholders of publicly traded companies
  • Allow (only) those shareholders an imputation credit for corporate taxes – 17.5 percent of cash or stock dividends
  • Provisions to address volatility, companies going public, tax-exempt shareholders, transition, etc.

Discussion of the proposal:

  • Daniel N. Shaviro (NYU)
  • Joann Weiner (George Washington)
  • Howard Gleckman (Tax Policy Center)

TaxVox: An Interesting New Corporate Tax Reform Plan, by Howard Gleckman:

Eric and Alan base their concept on one big idea: Because shareholders are relatively immobile, it is easier to tax corporate profits at the investor level than at the corporate level. Today, the U.S. bases taxes on the source of a firm’s income or its legal residence, two factors that can be easily manipulated by a company looking to minimize its tax bill.

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