Think the corporate tax system is broken? Go ahead, try to fix it.
To offset the costs of cutting corporate tax rates, policymakers will need to roll back tax preferences, each of which has powerful defenders, Marron writes. To illustrate the challenge, Marron highlights a tax reform calculator from the Committee for a Responsible Federal Budget.
Almost everyone in Washington wants to lower the corporate tax rate. President Obama wants to go from today’s 35 percent down to 28 percent. Governor Romney and Ways and Means Chairman Camp want to get to 25 percent.
There’s just one problem: paying for it. To offset the costs of cutting rates, policymakers will need to roll back tax preferences, each of which has powerful defenders.
To illustrate the challenges, the Committee for a Responsible Federal Budget just released a nifty corporate tax reform calculator that shows how your revenue goals and willingness to cut tax preferences affect what tax rate you have to accept.
Bottom line: going low is harder than it sounds.