The corporate tax rate has needed to be addressed for years, and TCF fellow Edward Kleinbard says that the time may finally have come for policymakers to lower the current rate of 35 percent. The two hurdles to corporate tax reform are pass-through entities and figuring out what to do about the international income of U.S. multinationals.
Offering bargain corporate-tax rates to induce small- and medium-sized companies to accept tax reform might seem distasteful to some, but it’s a good deal for America. One comprehensive and sensible tax system for all businesses above a certain size should be the ultimate objective.
Read the full article by Kleinbard featured in Bloomberg View.
Among the few tax experts who claim they are hopeful to see some corporate tax reform in the near future is TCF fellow Edward Kleinbard. He says in a recent Forbes that one of the priorities for this reform includes a tolerance for losing revenue.
"Among the lessons of the many failed tax reform attempts of the last three decades are that tax reform will not come from a commission; it will not result from a bill drafted by a committee chair behind closed doors; it will not be a flat tax; it will not be a consumption tax as a replacement for the income tax; and it will not succeed through dynamic scoring. Rather, tax reform will result from the establishment of a fully bipartisan architecture for the bill at the outset."
This article can be read here.
Tactics used to generate competition and therefore economic growth are the tax cuts, rebates, and other promises by governments that draw businesses to a specific locale. Some studies have shown, however, that these tactics are only effective in getting businesses to relocate, but fall short in terms of actual financial boosts. TCF fellow Mark Thoma weighs the pros and cons that these types of incentives generate.
Proponents of lower taxes and reduced regulation generally favor this type of competition, while those who worry about the social services government is able to provide and want to maintain regulations that enhance their quality of life are generally opposed.
Read the full article from CBS Moneywatch.
There has been long-time dissension between how Republicans and Democrats view and assist the middle-class. Unfortunately, many of the government benefits that taxes provide are actually portrayed through what TCF fellow Suzanne Mettler calls the "submerged state," and many recipients do not realize their existence.
That is, the way the government actually benefits the middle class often goes unseen, while taxes, particularly the income tax, are very obvious. Mettler notes that our federal tax code is full of handouts like the Mortgage Interest Deduction, but these tax benefits primarily benefit the affluent and middle class. "Our government is integrally intertwined with everyday life from healthcare to housing, but in forms that often elude our vision," she argues.
Mettler's piece is featured in the Huffington Post.
All is fair in love and taxes, right? TCF fellow and tax expert Mark Thoma says that tax fairness is a difficult issue to solve when considering income disparities and benefit principles. The progressive tax option would tax each income group at a rate in which each experiences the same amount of financial "pain." Some say the current progressive tax system is not strong enough in the United States.
The implication is that taxes for the wealthy should be increased, and taxes for the poor should be reduced until both sacrifice equally when they pay the last dollar of taxes.
Read Thoma's full article featured in CBS Moneywatch.
The approach to appropriate income and wealth distribution has always been at odds between Democrats and Republicans. Republicans seem to deny the existence of racial gaps when it comes to this distribution, whereas Democrats aim to alleviate them. TCF fellow Suzanne Mettler is cited in the Al-Jazeera America article saying that Republicans use items such as "subtle tax breaks and benefits such as marriage subsidies and the mortgage interest deduction," which are part of what she calls the "submerged state" to garner electoral support.
Black income growth stalls when a Democratic president is paired with a Republican Congress. Furthermore, the longer Democrats are in power, the stronger the economic gains for blacks. By contrast, blacks fare worse when Republicans are in office longer. There are similar racial gaps in the criminal justice system.
Read the full article from Al-Jazeera America.
In recent decades, and especially since 2000, the richest Americans have enjoyed soaring income and wealth while the rest of the population's living standards have stagnated. The Century Foundation was one of the first institutions to raise serious concerns about these trends and propose ideas for improving economic conditions for all Americans- not just the fortunate few.
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