Number: RL34229
Title: Corporate Tax Reform: Issues for Congress
Authors: Jane G. Gravelle and Thomas L. Hungerford, Government and Finance Division 
Abstract: This report provides an overview of corporate tax issues and discusses potential reforms in the context of these issues, with particular attention to some of the recent research concerning large behavioral responses and their implications for revenue and distribution. The first section reviews the size and history of the corporate income tax, and discusses an important issue that has been given little attention by those who propose deep cuts in the corporate tax: its role in preventing the use of the corporate form as a tax shelter by wealthy business owners. This section also discusses the potential effect of behavioral responses on corporate tax revenues. The second section examines the role of the corporate tax in contributing to a progressive tax system and discusses claims that the burden falls on workers. The third section reviews arguments relating to efficiency and revenue yield, and traditional criticisms of the corporate tax as one that causes important behavioral distortions. One aspect of this discussion is the question of how the tax might be viewed differently in a more global economy. The final section examines options for reform.
Pages: 45
Date: July 24, 2008