Think Tankers Toder, Viard: US Should Consider Dumping Corporate Tax

Friday, 08 Aug 2014 10:07 AM

By Dan Weil

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink
Most participants in the corporate tax debate agree the system should be reformed, but how?

"The United States should either reach agreement with its trading partners on a common way to allocate profits of multinational corporations or should scrap the corporate tax and directly tax shareholders instead," Eric Toder, a fellow at the Urban Institute, and Alan Viard, a resident scholar at the American Enterprise Institute, write in an article for MarketWatch.

The U.S. corporate tax rate — about 39 percent including state taxes — is the highest in the developed world, they note. Yet the government collects less in corporate taxes than other developed countries, only about 2 percent of GDP.

Editor’s Note:
Get These 4 Stocks Before 399% Stock Market Rally!


As for the first possible solution, the government could "seek international cooperation on defining the source of corporate income," Toder and Viard suggest.

"Agreement on common rules for allocating income would stop the shifting of profits to tax havens, without putting U.S. multinationals at a competitive disadvantage."

Then there's the nuclear option, eliminating the corporate tax. "The tax system would no longer discourage domestic investment, reward U.S. companies for shifting income elsewhere, or favor foreign over U.S.-resident companies," Toder and Viard write.

"Both these options would confront difficult design choices and significant political obstacles. We do not pretend that either is likely to be enacted soon. At some point, though, the United States has to move beyond tinkering with the current system and fundamentally reform the way we tax corporate income."

President Obama wants to outlaw tax inversions, whereby U.S. corporations take over foreign ones and then domicile overseas to avoid U.S. taxes.

Grover Norquist, president of American for Tax Reform, isn't too impressed with the idea. "It's the president's fault that he has done nothing in five years to reduce corporate rates, which he has said he was going to do," Norquist tells CNBC.

Editor’s Note: Get These 4 Stocks Before 399% Stock Market Rally!

Related Stories:

© 2014 Moneynews. All rights reserved.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
You May Also Like

Bond Traders See More Turbulence Ahead for US Interest Rates

Tuesday, 16 Sep 2014 18:23 PM

Rising volatility in U.S. interest rates is seen in coming months as traders expect the Federal Reserve to move away fro . . .

Census: Household Income Continues to Stagnate Under Obama

Tuesday, 16 Sep 2014 11:11 AM

The median U.S. household income remained nearly flat at $51,939 in 2013 compared with the previous year, according to f . . .

Business Roundtable CEOs See 'Underperforming' Economy

Tuesday, 16 Sep 2014 13:38 PM

Corporate CEOs apparently aren't too impressed with the economy. . . .

Most Commented
Top Stories

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved