Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/141841
Authors: 
Dharmapala, Dhammika
Year of Publication: 
2016
Series/Report no.: 
CESifo Working Paper 5864
Abstract: 
The reform of corporate and business taxation is central to current tax policy debates in the United States. This paper provides a framework for analyzing reform proposals by describing the lessons from current economic research for business tax reform, addressing both international and domestic reforms within a unified perspective. The paper begins by identifying ten potential inefficiencies created by the current corporate tax regime. It then discusses three classes of reform proposals. The first involves a substantially lower corporate tax rate and a territorial regime. The second is a formula apportionment system. The third category includes a destination-based cash flow tax. The paper evaluates each of these proposals in the light of the framework introduced earlier. It concludes that the relatively modest reforms currently under discussion would address only a few of these margins. In contrast, more fundamental reforms would eliminate all or most of the inefficiencies of corporate taxation.
Subjects: 
corporate tax
business taxation
international taxation
tax reform
territorial taxation
formula apportionment
cash flow tax
JEL: 
H25
F23
Document Type: 
Working Paper

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