8. Just about everyone agrees that the U.S. corporate income tax system is a mess. That includes GE, which said in a statement, “The tax code is complex and outdated, which is exactly why tax reform must happen this year. GE has long been advocating to simplify and modernize the tax system—even if it means we pay more in taxes.”
9. Even if 35 percent isn’t what companies pay, the top rate does matter. As every student of intro econ learns, decisions are made at the margin, not on the average. If the government grabs 35 percent of the last dollar of income you earn, you'll be at least a bit discouraged from earning that last dollar. “There’s a good argument for coming up with some broader business tax with a lower rate that doesn’t allow so many deductions,” said Alan Cole, an economist at the Tax Foundation, which describes itself as nonpartisan and which Cole called more “market-leaning” than ITEP and Citizens for Tax Justice.
10. The report urges Congress to stop allowing U.S. companies to defer federal taxes on offshore profits. More than $1 trillion in cash has piled up abroad because companies don’t want to pay U.S. tax on it. That may be a good idea, but only if it’s coupled with a cut in the top rate. Otherwise U.S. companies would have an even stronger incentive to shift their headquarters overseas to escape U.S. taxation, Cole said.
Now go pay your taxes.
This article was provided by Bloomberg News.