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1 Scott Hodge, The Challenges of Corporate-Only Revenue Neutral Tax Reform 1 (2015)

handle is hein.taxfoundation/chcorportr0001 and id is 1 raw text is: FOUNDATION The Challenges of Corporate-Only FISCAL Revenue Neutral Tax Reform FACT June 2015 By Scott Hodge No. 471 President Key Fundings: Policymakers are currently focused on corporate tax reform to bring down the high statutory corporate income tax rate from 35 percent to 25 percent. A pure 25 percent corporate tax cut would increase the size of the economy by at least 2 percent. However, many lawmakers want to reduce the corporate income tax rate in a revenue neutral manner. There are not enough corporate-only tax expenditures that could be eliminated to pay for a full corporate income tax cut to 25 percent. Many corporate tax expenditures are also used by pass-through businesses. Eliminating them will increase taxes on pass-through businesses without giving them a lower tax rate. According to the Tax Foundation Taxes and Growth Dynamic Model, eliminating corporate tax expenditures in order to pay for a lower corporate rate would fully negate the expected growth from the rate cut itself. The Tax Foundation is a 501(c)(3) non-partisan, non-profit research institution founded in 1937 to educate the public on tax policy. Based in Washington, D.C., our economic and policy analysis is guided by the principles of sound tax policy: simplicity, neutrality, transparency, and stability. @2015 Tax Foundation Distributed under Creative Commons CC-BY NC 4.0 Editor, Melodie Bowler Designer, Dan Carvajal Tax Foundation 1325 G Street, NW, Suite 950 Washington, DC 20005 202.464.6200 taxfoundation.org