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The American Tax Policy Institute and the Urban-Brookings Tax Policy Center Cordially Invite You to Attend

The Economic Effects of Corporate Rate Reductions

Friday, March 29, 2013
8:30-11:00 a.m., ET



Part 1

Part 2



An often mentioned element in discussions of changes to federal tax policy is that corporate tax rates will be substantially reduced, with other changes made to the tax code to offset the revenue effects.  This conference will explore the implications of such a policy in a variety of areas that are often not well understood.

This morning conference will provide an overview of four aspects of business taxation directly, or indirectly, affected by changes in the corporate tax rate.  The goal of this program is to help those either involved or interested in the current tax reform debate better understand the complexity of the system and the potential economic effects of a change in the rate structure.


8:30 -9:00 Continental Breakfast

9:00 – 10:00 

  • Overview of  U.S. corporate income taxation
    Eric Toder, Tax Policy Center  

    This presentation will set the stage by summarizing major corporate tax provisions, changes in corporate revenues over time, comparison of U.S. corporate rates and revenues to other OECD countries, and data on relative shares of revenue raised by individual and corporate-level taxation of business income.

  • Pass-through entities, non-corporate businesses, and organizational form
    George Plesko, University of Connecticut

    Pass-through and non-corporate businesses follow the same tax rules for determining their income but pay taxes at the individual tax rate. Any business tax base-broadening that is undertaken to offset the cost of a corporate rate reduction will result in a higher income tax burden on these entities. In addition, since 1986, the corporate tax rate has been higher than the individual rate, which and has affected the choice of organization form used by businesses. Were the corporate rate to become substantially lower than the individual rate the incentive for firms to elect to be subject to the corporate tax will substantially increase, with effects on overall federal revenue.

  • Corporate Finance
    William Gentry, Williams College

    The corporate tax rate affects the incentives for the use of debt or equity, to pay dividends or repurchase shares, to lease or purchase assets, and the structure of transactions.This session outlines the effects of a lower corporate tax rate could have on these financing activities.

  • Moderator - Victoria Perry, International Monetary Fund

10:00 – 10:15  Break

10:15 – 11:00

  • International implications of a reduced corporate tax rate
    James Hines, University of Michigan

    The US system of international taxation has received substantial attention and calls for reform. The US corporate tax rate, apart from other features of international tax system, creates incentives for the location and repatriation of income.This session will discuss the effects a lower corporate rate would have under the current system, and possible implications for the broader reform of international taxation.

  • Financial reporting
    Douglas Shackelford, University of North Carolina

    Publicly traded corporations are subject to multiple reporting requirements. In addition to their tax filings, these corporations must file financial statements with the SEC. The rules for financial reporting differ in important ways from those of tax reporting, and changes in the corporate tax rate will have a variety of effects on how corporations report income to their shareholders and the public. While a lower corporate tax rate will result in higher after-tax profits, many corporations may find themselves worse off because of the ways the corporate tax rate affects the valuation of certain assets

  • Moderator - Victoria Perry, International Monetary Fund

11:00 Adjourn 


At the Urban Institute
2100 M Street N.W., 5th Floor, Washington, D.C.

A light breakfast will be provided at 8:30 a.m. The forum will begin promptly at 9:00 a.m.