Tags: Sperling | corporate | tax | reform

Economist Sperling: Corporate Tax Reform Possible in 2015

By    |   Thursday, 09 October 2014 02:11 PM

While there is widespread agreement that the U.S. corporate tax regime is ripe for reform, not many experts think it will happen soon, given the political gridlock in Washington.

But economic consultant Gene Sperling, former director of President Obama's National Economic Council, believes it can happen as early as next year.

"If you look at the details, President Obama and key Republicans share plenty of common ground," he writes in The Wall Street Journal.

One point of accord is that the 35 percent maximum federal corporate tax rate, the highest in the developed world, should be reduced.

And, "contrary to perception, there is not that wide of a gap between the Obama White House and key Republicans in Congress" as to how far the rate should be cut, Sperling explains.

Obama wants a reduction to 28 percent in the maximum rate and 25 percent for manufacturers. Republicans, meanwhile, seek a 25 percent maximum rate across the board.

"But the choice between 28 percent and 25 percent is less of an ideological issue than a question of how deeply Congress is willing to cut tax expenditures," Sperling argues.

Other areas where the two sides are close in agreement are a minimum tax on foreign earnings, revenue neutrality, a grand bargain on jobs and helping small businesses and pass-through entities, he notes.

Legendary investor Warren Buffett also thinks the time is right for corporate tax reform. "It's good to have a time out [from tax inversions] while we work out a logical corporate tax code," he tells Politico, referring to Obama's recent action to limit tax inversions.

But an effort to reform corporate taxes without boosting the deficit could spell trouble, Buffett notes. "Now if it's revenue neutral, I guarantee you that there will be a lot of corporations that will therefore pay more, and they'll be there on K Street like Occupy Wall Street."

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While there is widespread agreement that the U.S. corporate tax regime is ripe for reform, not many experts think it will happen soon, given the political gridlock in Washington.
Sperling, corporate, tax, reform
315
2014-11-09
Thursday, 09 October 2014 02:11 PM
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