Yet he has never proposed comprehensive reform of either the personal or corporate income tax.

The Corporate Tax Conundrum

Unblocking Corporate Governance Reform

That said, if the goal of corporate tax reform is to boost investment and job creation, broadening the tax base to pay for a lower rate could be counterproductive.

Both President Barack Obama s plan for business tax reform and the Simpson Bowles deficit reduction plan propose reducing such expenditures to pay for a reduction in the corporate tax rate.

A lower corporate tax rate would weaken this justification. Moreover, pension funds, retirement plans, and non profit organizations, which receive about 50 of all corporate dividends, do not pay tax on these earnings, and would benefit from a lower corporate tax rate.

Instead of cutting proven tax incentives for business investment, the US should offset at least some of the revenue losses from a lower corporate tax rate by raising tax rates on corporate shareholders.

Indeed, cutting these items to pay for a reduction in the corporate tax rate could end up increasing the tax on corporate economic activity in the US.

These revenue losses could be offset by curtailing so called corporate tax expenditures deductions, credits, and other special tax provisions that subsidize some economic activities while penalizing others and broadening the corporate tax base.

Fundamental tax reform must strengthen incentives, reduce distorting tax expenditures, and raise revenue.

It would also reduce numerous efficiency reducing distortions in the US tax code, including substantial tax advantages for debt financing over equity financing and for non corporate businesses over corporate businesses.

As a consequence of the ensuing tax competition, corporate tax rates have fallen to 15 25 in most European countries.

In order to survive international tax competition and thus be able to rely on corporate taxes as a source of revenue Japan s corporate tax rate should be lowered in the long run.

The first is comprehensive tax reform aimed at aligning tax policy with desirable economic incentives.

Obama would raise the top marginal tax rates on wages, capital gains, dividends, interest, and estates, especially on higher income individuals and small businesses. Yet he has never proposed comprehensive reform of either the personal or corporate income tax.

The third arrow is not a traditional industrial policy based approach. On the contrary, it emphasizes reform of the labor market, deregulation, and a reduction in the corporate tax rate.

That is why countries around the world have been cutting their corporate tax rates.

The top personal income tax rate (also levied on capital gains), the sales tax rate, the corporate tax rate, and the gas tax are all at or near the highest of any state.

That had been accomplished by widening the tax base, improving administration efficiency, reducing corporate income tax, introducing a personal income tax of 10 per cent and keeping value added tax at 10 per cent.

Zurich Committee of experts for the reform of tax offences.

In 1993, the Czech Republic had implemented fundamental tax reform.

Now, what we've got to work with shrinks a lot thanks to corporate tax loopholes and unprecedented tax breaks for the richest 1 .

The corporate tax rate is a flat 18 , one of the lowest in the world.

So, interest group politics commonly produce substantial obstacles to reform of corporate governance.

BERKELEY The United States now has the highest statutory corporate income tax rate among developed countries.

Yet at the same time, the corporate sector lobbies aggressively to gut environmental regulations, slash corporate tax rates, and avoid their own responsibility for ecological destruction.

Moreover, a high corporate tax rate is an ineffective and costly tool for producing revenues, owing to innovative financial transactions and legal tax avoidance mechanisms.

But all the rest are hit with one of the highest corporate tax rates in the world.

Raising revenue through tax reform will have to mean reducing the special deductions and exclusions that now lower tax receipts.

Unfortunately, advanced countries have implemented very little fundamental tax reform so far.

And curtailing accelerated depreciation, the manufacturing production deduction, and the R D tax credit which account for about 80 of corporate tax expenditures would involve significant tradeoffs.

Obama s temporary first year expensing proposal for capital purchases (a good idea as part of a permanent corporate tax overhaul) could get folded into broader tax legislation.

TNCs are thus expected to abide by a country's tax law and to meet their tax obligations in good faith. Corporate responsibility in this regard could, for

In Germany, the most urgent needs are for tax and labor market reform.

In recent years, a tax reform movement has formed behind the FairTax proposal.

Some LDCs have made progress in undertaking tax reform, broadening the non tax revenue base and improving the efficiency of financial institutions.

Activities will also include the development and promotion of effective mobilization of financial resources, taxation, especially measures to reform tax systems, combat tax evasion and widen the tax base.

Meanwhile, corporate profits have soared. The GDP share of after tax corporate profits is at a nbsp record high, whereas labor compensation has plunged to its lowest share since 1950.

In 1999, when Laar became Prime Minister again, he abolished the tax on corporate profit, which was harming entrepreneurship.

Most countries that reduced their corporate tax rates have followed this path, while the US has done the opposite.

Broadening the income tax base is a central element of the highly regarded Simpson Bowles proposals for tax reform in the United States.

Unfortunately, movements towards fundamental tax reform are on the back burner in most countries.

This could cover issues concerning harmonization of codes and policies, contract enforcement, tax and other incentives, monitoring of corporate practice with respect to transfer pricing, tax avoidance, and the like.

But each percentage point reduction in the corporate tax rate would reduce federal revenues by about 12 billion per year.

The second incentive is corporate tax exemption provided for the portion of profit generated through research and software development activities.