Corporate tax reform: When you wish upon a star… Disney CEO Bob Iger finds the corporate tax code anti-competitive and ridiculously complex, and thinks Disney and other corporations’ taxes are too high. “It doesn't mean that a company shouldn't pay taxes, but I think the structure is off ....The tax rates should be lowered, and the loopholes should be closed.”
TPC’s Eric Toder and AEI’s Alan Viard have a solution… Next Friday, June 17, they’ll release their latest proposal for corporate tax reform at an event at the American Enterprise Institute. They’ll suggest taxing corporate profits mostly at the individual shareholder level rather than directly at the firm level. They’d reduce the corporate tax rate to 15 percent and tax American shareholders’ dividends and accrued capital gains at ordinary income tax rates.
And about those complaints about individual taxes… In its most recent analysis of the distribution of income and taxes in the US, the Congressional Budget Office found that federal taxes are quite progressive and effective rates for most individuals are roughly where they have been for the past three decades. TPC’s Howard Gleckman notes that liberal complaints about the rich avoiding taxes and conservative objections to the wealthy paying record high taxes under President Obama are largely political myth.
Tax policy in a few states could change course by 180 degrees this year. Tax Analysts’ Jeremy Scott offers a gubernatorial forecast for this November’s elections and implications for tax policy. Democrats are most likely to lose Missouri and West Virginia. “If they do, the tax outlook in those states will change dramatically.” That means no more talk of tax increases or gas taxes, and more plans for spending cuts and tax relief.
As for next week on the Hill… The Senate Finance Committee holds a hearing Tuesday on energy tax policy, and one on Wednesday about business challenges and opportunities in the digital economy. The House Budget Committee will hold a hearing Wednesday on the need to set fiscal goals, with testimony from Maya MacGuineas of the Committee for a Responsible Federal Budget and Doug Holtz-Eakin of the American Action Forum. On Thursday, the panel will hold a Members’ Day on budget process reform.
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