{
  "id": "R42726",
  "type": "CRS Report",
  "typeId": "REPORTS",
  "number": "R42726",
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  "source": "EveryCRSReport.com, University of North Texas Libraries Government Documents Department",
  "versions": [
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      "source": "EveryCRSReport.com",
      "id": 436046,
      "date": "2014-12-01",
      "retrieved": "2016-04-06T19:53:19.778735",
      "title": "The Corporate Income Tax System: Overview and Options for Reform",
      "summary": "Many economists and policy makers believe that the U.S. corporate tax system is in need of reform. There is, however, disagreement over why the corporate tax system needs to be reformed, and what specific policy measures should be included in a reform. To assist policy makers in designing and evaluating corporate tax proposals, this report (1) briefly reviews the current U.S. corporate tax system; (2) discusses economic factors that may be considered in the corporate tax reform debate; and (3) presents corporate tax reform policy options, including a brief discussion of current corporate tax reform proposals. \nThe current U.S. corporate income tax system generally taxes corporate income at a rate of 35%. This tax is applied to income earned domestically and abroad, although taxes on certain income earned abroad can be deferred indefinitely if that income remains overseas. The U.S. corporate tax system also contains a number of deductions, exemptions, deferrals, and tax credits, often referred to as \u201ctax expenditures.\u201d Collectively, these provisions reduce the effective tax rate paid by many U.S. corporations below the 35% statutory rate. In 2014, the sum of all corporate tax expenditures was $154.4 billion. \nThe significance of the corporate tax as a federal revenue source has declined over time. At its post-WWII peak in 1952, the corporate tax generated 32.1% of all federal tax revenue. In 2013, the corporate tax accounted for 9.9% of federal tax revenue. The decline in corporate revenues is a combination of decreasing effective tax rates, an increasing fraction of business activity that is being carried out by pass-through entities (particularly partnerships and S corporations, which are not subject to the corporate tax), and a decline in corporate sector profitability. \nA particular aspect of the corporate tax system that receives substantial attention is the 35% statutory corporate tax rate. Although the United States has the world\u2019s highest statutory corporate tax rate, the U.S. effective corporate tax rate is similar to the Organization for Economic Co-operation and Development (OECD) average. Further, the United States collects less in corporate tax revenue relative to Gross Domestic Production (GDP) (2.3% in 2011) than the average of other OECD countries (3.0% in 2011). \nThis report discusses a number of economic considerations that may be made while evaluating various corporate tax reform proposals. These might include analyses of the likely effect on households of certain reforms (also known as incidence analysis). Policy makers might also want to consider how certain corporate tax provisions contribute to the allocation of economic resources, choosing policies that promote an efficient use of resources. Other goals of corporate tax reform may include designing a system that is simple to comply with and administer, while also promoting competitiveness of U.S. corporations. \nCommonly discussed corporate tax reforms include policies that would broaden the tax base (i.e., eliminate tax expenditures) to finance reduced corporate tax rates. Concerns that the U.S. corporate tax system inefficiently imposes a \u201cdouble tax\u201d on corporate income have led some to consider an integration of the corporate and individual tax systems. The treatment of pass-through income\u2014business income not earned by C corporations\u2014has also received considerable attention in tax reform debates. How the United States taxes income earned abroad, and the possibility of moving to a territorial tax system, have emerged as important issues.",
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      "topics": [
        {
          "source": "IBCList",
          "id": 4092,
          "name": "Tax Reform"
        },
        {
          "source": "IBCList",
          "id": 4514,
          "name": "Fiscal Policy Considerations"
        },
        {
          "source": "IBCList",
          "id": 571,
          "name": "Business Taxation"
        }
      ]
    },
    {
      "source": "University of North Texas Libraries Government Documents Department",
      "sourceLink": "https://digital.library.unt.edu/ark:/67531/metadc807489/",
      "id": "R42726_2014Feb14",
      "date": "2014-02-14",
      "retrieved": "2016-03-19T13:57:26",
      "title": "The Corporate Income Tax System: Overview and Options for Reform",
      "summary": null,
      "type": "CRS Report",
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    },
    {
      "source": "University of North Texas Libraries Government Documents Department",
      "sourceLink": "https://digital.library.unt.edu/ark:/67531/metadc122253/",
      "id": "R42726_2012Sep13",
      "date": "2012-09-13",
      "retrieved": "2012-11-30T09:28:34",
      "title": "The Corporate Income Tax System: Overview and Options for Reform",
      "summary": "This report (1) briefly reviews the current U.S. corporate tax system; (2) discusses economic factors that may be considered in the corporate tax reform debate; and (3) presents corporate tax reform policy options, including a brief discussion of current corporate tax reform proposals.",
      "type": "CRS Report",
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      ],
      "topics": [
        {
          "source": "LIV",
          "id": "Corporation taxes",
          "name": "Corporation taxes"
        },
        {
          "source": "LIV",
          "id": "Business",
          "name": "Business"
        },
        {
          "source": "LIV",
          "id": "Taxation",
          "name": "Taxation"
        },
        {
          "source": "LIV",
          "id": "Business income tax",
          "name": "Business income tax"
        }
      ]
    }
  ],
  "topics": [
    "Economic Policy",
    "Foreign Affairs"
  ]
}