Is the business tax code ripe for overhaul?
From burger and doughnut makers to pharmaceutical firms, companies moving their legal headquarters abroad have become avatars for a debate about the U.S. corporate tax system. On one side are business groups and their advocates who say these corporate “inversions” are symptoms of a business tax rate that is the highest in the developed world and a code that taxes all profits worldwide. On the other side are those, like the Obama administration, who argue that few companies pay the full rate and that inverters enjoy the benefits of the U.S. economic system without paying their fair share of the costs. As politicians, business executives and economists debate the future of the tax code, here are some of the issues under consideration: Does the current tax code dampen U.S. economic growth? Can the government take steps to keep U.S. companies from moving to foreign tax jurisdictions? Should the United States change the way it taxes foreign profits?
Bartlett, Bruce, “The Benefit and the Burden: Tax Reform, Why We Need It and What It Will Take,” Simon & Schuster, 2012. A former official in two Republican administrations explains the obstacles to tax reform.
Birnbaum, Jeffrey H., and Alan S. Murray, “Showdown at Gucci Gulch: Lawmakers, Lobbyists, and the Unlikely Triumph of Tax Reform,” Vintage Books, 1987. Two Wall Street Journal reporters chronicle the political battles that led to the 1986 Tax Reform Act, widely considered the most comprehensive U.S. tax-reform legislation of the 20th century.
Smith, Stephen, “Taxation: A Very Short Introduction,” Oxford University Press, 2015. A professor of economics at University College London provides a brief yet thorough review of taxation, with a special emphasis on how it varies from country to country.
Steuerle, C. Eugene, “Contemporary U.S. Tax Policy,” Urban Institute Press, 2008. A senior fellow at the Urban Institute think tank provides what a Harvard University professor called “the bible on the last 25 years of U.S. tax policy.”
Sullivan, Martin A., “Corporate Tax Reform: Taxing Profits in the 21st Century,” Apress, 2011. A consultant and author for the publication Tax Notes argues that there is no economic justification for a corporate income tax but also explains why it is so difficult to eliminate.
Weisman, Steven R., “The Great Tax Wars,” Simon & Schuster, 2002. A historian traces the political fights that led to the adoption of the income tax in the early 20th century.
Johnston, David Cay, “U.S. Corporations Are Using Bermuda to Slash Tax Bills,” The New York Times, Feb. 18, 2002, http://tinyurl.com/
Kocieniewski, David, “Why Microsoft, With $100 Billion, Wants a Loan for LinkedIn,” Bloomberg Technology, June 13, 2016, http://tinyurl.com/
Mider, Zachary, and Jesse Drucker, “Tax Inversion: How U.S. Companies Buy Tax Breaks,” Bloomberg QuickTake, April 6, 2016, http://tinyurl.com/
Olorunnipa, Toluse, and Angela Greiling Keane, “Obama Renews Carried Interest Tax Fight With Republican Help,” Bloomberg News, Sept, 16, 2015, http://tinyurl.com/
Rubin, Richard, “U.S. Companies Are Stashing $2.1 Trillion Overseas to Avoid Taxes,” Bloomberg News, March 4, 2015, http://tinyurl.com/
Reports and Studies
“Corporate Income Tax: Effective Tax Rates Can Differ Significantly from the Statutory Rate,” U.S. Government Accountability Office, May 2013, http://tinyurl.com/
“Fortune 500 Companies Hold a Record $2.4 Trillion Offshore,” Citizens for Tax Justice, March 4, 2016, http://tinyurl.com/
“Whopper of a Tax Dodge: How Burger King’s Inversion Could Shortchange America,” Americans for Tax Fairness, December 2014, http://tinyurl.com/
Cole, Alan, “Corporate and Individual Tax Expenditures,” Tax Foundation, Aug. 3, 2015, http://tinyurl.com/
Pomerleau, Kyle, “An Overview of Pass-through Businesses in the United States,” Tax Foundation, Jan. 21, 2015, http://tinyurl.com/
Rosenthal, Steven M., and Lydia S. Austin, “The Dwindling Taxable Share Of U.S. Corporate Stock,” Tax Notes, May 16, 2016, http://tinyurl.com/
Toder, Eric, and Alan D. Viard, “A Proposal To Reform The Taxation Of Corporate Income,” American Enterprise Institute and Tax Policy Center, June 2016, http://tinyurl.com/
Mernit, Judith Lewis, “How the Carried-Interest Loophole Makes the Super-Rich Super-Richer,” Capital & Main, June 21, 2016, http://tinyurl.com/
Scheiber, Noam, “New York Legislators Plan to Introduce Measure on Carried Interest Tax,” The New York Times, March 6, 2016, http://tinyurl.com/
Rainey, Ryan, “GOP Senators Chide Treasury Dept. on Inversions Rules,” Morning Consult, July 5, 2016, http://tinyurl.com/
Rubin, Richard, “Firms That Left U.S. Still Enjoy Perks,” The Wall Street Journal, June 13, 2016, http://tinyurl.com/
Faler, Brian, “After much tax reform talk, House GOP finally agrees on a plan,” Politico, June 23, 2016, http://tinyurl.com/
Jagoda, Naomi, “Hatch touts benefits of deduction for dividends,” The Hill, May 17, 2016, http://tinyurl.com/
Qiu, Linda, “PolitiFact’s guide to the 2016 presidential candidate tax plans,” PolitiFact, April 7, 2016, http://tinyurl.com/
Territorial Tax System
Close, Cormac, “Why Corporations Would Love a ‘Territorial’ Tax – And You Shouldn’t,” OurFuture.org, Aug. 13, 2015, http://tinyurl.com/
Katz, David M., “Cut U.S. Rates, Launch Territorial Tax System, Reports Contend,” CFO.com, March 11, 2015, http://tinyurl.com/
American Enterprise Institute
1150 17th St., N.W., Washington, DC 20036
Conservative pro-markets group that includes tax policy in its analysis.
Center on Budget and Policy Priorities
820 First St., N.E., Suite 510, Washington, DC 20002
Left-leaning group that analyzes the federal budget and taxes for their effects on low-income Americans.
Citizens for Tax Justice
1616 P St., N.W., Suite 200, Washington, DC 20036
Liberal advocacy group that has published a number of studies on corporate taxation over its 37-year history.
Economic Policy Institute
1225 I St., N.W., Suite 600, Washington, DC 20005
Liberal think tank that focuses on low- and middle-income wage earners; has tax-related material at http://www.epi.org/
214 Massachusetts Ave., N.E., Washington, DC 20002-4999
Conservative think tank with tax-related policy briefs at http://www.heritage.org/
Internal Revenue Service
1111 Constitution Ave., N.W., Washington, DC 20224
The federal agency for tax collection and enforcement.
Joint Committee on Taxation
502 Ford House Office Building, Washington, DC 20515
Nonpartisan committee of the U.S. Congress.
1325 G St., N.W., Suite 950, Washington, DC 20005
Right-leaning tax-policy research organization.
Tax Policy Center
2100 M St., N.W., 4th Floor, Washington, DC 20037
Left-leaning tax-policy research organization; joint project of the Urban Institute and Brookings Institution.
U.S. Government Accountability Office
441 G St., N.W., Washington, DC 20548
Independent federal agency that includes taxes among its many topics of examination on behalf of Congress.