Corporate Tax Reform: Can
We Repeat 1986?
Eric Toder
Urban-Brookings Tax Policy
Center
Tax Policy Center |
www.taxpolicycenter.org
Fewer Business Receipts
Face Corporate Income Tax
100%
90%
80%
70%
60%
Flow Through Entities
C Corporations
50%
40%
30%
20%
10%
0%
1986
1994
Tax Policy Center |
2001
2008
www.taxpolicycenter.org
1
Dividend Taxes Paid at
Corporate and Individual Level
100%
90%
80%
70%
60%
Individual Share
Corporate Share
50%
40%
30%
20%
10%
0%
1985
1988
Tax Policy Center |
1993
2001
2003
www.taxpolicycenter.org
2013
2
Largest Corporate Tax
Expenditures, 2013-17
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Other
Corporate
Individual
Total Revenue
Revenue Loss Revenue Loss
Loss
Tax Policy Center |
www.taxpolicycenter.org
Expensing of R&D
costs
Low-Income Housing
Credit
Deduction for US
Production
Deferral of Income of
CFCs
Accelerated
Depreciation
3
Corporate Base Broadening, 1986 Tax
Reform Effect on Corporate Receipts in
1987-91
$250
Other
$14.9 B
$9.2 B
$200
$11.5 B
$22.2 B
Billions
$150
$60.3 B
(25.4%)
Corporate Rate
Cuts
-$116.7 B
Insurance
Provisions
Corporate AMT
$100
$50
$0
Foreign
Provisions
$118.9 B
(50.1%)
By Provision
Tax Policy Center |
Net Change in
Receipts
$120.3 B
By Type
www.taxpolicycenter.org
Accounting
Provisions
Investment Tax
Credit
4
Potential Revenue-Neutral Cut in
Top
Corporate
Rate
(Very
Rough)
40%
35%
30%
25%
24.7%
26.3%
1: All Tax
Expenditures
2: Tax
Expenditures
Except
International
31.5%
33.1%
33.5%
3: 2 Except
Accelerated
Depreciation
and R&E
expensing
4: Targeted
Preferences
Only
5: Obama
Budget
Proposals
20%
15%
10%
5%
0%
5