Number: RL33171
Title: Federal Business Taxation: The Current System, Its Effects, and Options for Reform
Authors: Donald J. Marples, Government and Finance Division 
Abstract: Various hypothetical alternatives exist for reforming the business tax system. One possibility is to move in the direction of the 1986 Tax Reform Act by broadening the existing tax base - that is, by eliminating tax benefits and preferences. Another possibility - and one that is favored by many economists - is to adopt some form of tax integration that would eliminate the double taxation of corporate income. A third option is to adopt a form of consumption tax, under which new business investment would be exempt from tax. Either corporate tax integration or a consumption tax could improve economic efficiency, but only if the design were to avoid the types of distortions present in the current system.
Pages: 22
Date: March 12, 2008