Wall Street Journal Discusses Possibility of Corporate Tax Reform
January 6, 2011
An article in today’s Wall Street Journal discusses the possibility of corporate tax reform in the near future, including a lower corporate income tax rate and fewer deductions—changes that would make the U.S. more competitive internationally and simplify the tax code. Here’s an excerpt:
The White House and congressional Republicans are moving from different directions toward a consensus that the U.S. corporate tax code needs a fundamental overhaul, a goal high on corporate leaders’ agenda.
Specific proposals for retooling the complex corporate-tax system aren’t on the table and the debate over the issue is sure to be lengthy and difficult. But President Barack Obama and Republican congressional leaders are separately sounding the same broad theme that corporate tax rates should be lower.
“Tax reform could be a significant boost to our competitiveness,” Rep. Eric Cantor (R., Va.), the new House majority leader, said this week. “I’m hopeful and expect the president to put some action behind his statements.”
Mr. Obama has expressed a willingness in recent interviews to have “a conversation” this year about lowering corporate-tax rates, while reducing the number of tax breaks. Administration officials caution that he hasn’t decided whether to push for action this year.
Executives on Mr. Obama’s Export Council last month said the U.S. corporate-tax code, with its top rate of 35%, puts U.S. companies at a disadvantage against rivals from countries where tax rates are lower. To be sure, many companies don’t pay that top rate. The panel recommends a federal rate of 20%.
A blue-ribbon fiscal commission appointed by Mr. Obama also recommended sharply lower corporate tax rates, along with elimination of targeted business tax breaks.
Click here for a Dec. 30 video of Tax Foundation President Scott Hodge on CNBC’s “Kudlow Report” discussing the prospect of President Obama proposing reform of corporate tax rates.