Crs Report for Congress: Federal Business Taxation

ISBN-10: 1293255483
ISBN-13: 9781293255483
Series: Crs Report for Congress
Pages: 28
Language: English
Published: 2013-11
Publisher: BiblioGov
Authors: Congressional Research Service: The Libr, David L. Brumbaugh

Description

A foundation of the broad tax revisions implemented almost 20 years ago by the Tax Reform Act of 1986 was tax "neutrality" -- the idea that economic efficiency and economic welfare are promoted if the distorting impact of taxes on business and other economic decisions is minimized. Based on this principle, the 1986 act broadened the tax base and reduced statutory tax rates set forth by the tax code. In time, however, the underlying thrust of tax policy has changed. Rather than neutrality and efficiency, recent business tax legislation has been guided more by a concern for promoting investment and capital formation, and by attention to the perceived impact of taxes on the ability of U.S. firms to compete with foreign companies. Further, recent interest in fundamental tax reform has been partly stimulated by these same concerns for capital formation and competitiveness. As 2005 closes, business tax policy is thus potentially at a crossroads, and it is useful to take stock of where the system stands, the economic effects it is known to have, and the principal options for reform. Several data series show a similar pattern in the level of corporate taxes: corporate income taxes have generally declined over ...