The ayes have it. Our panel of tax and accounting experts, whose opinionated essays are gathered here, voted 3-1 in favor of a major cut in the federal corporate income tax rate.
But whether congressional Republicans will have better luck fashioning a new corporate tax structure than they’ve had coming up with an alternative health-care scheme remains to be seen. Many of their opinions are reflected in this package of essays. For example, they believe the existing tax rate makes it tough for big multinational companies to compete globally unless they practice tax avoidance by parking large amounts of cash overseas, where corporate tax rates are almost universally lower than they are in the United States.
And, they say, lowering the rate would stimulate new corporate investment, job creation, and GDP growth.
Valid points all. At the same time, no one should pretend that a seismic shift in something as complex as economic policy can’t trigger a trove of negative consequences, foreseeable and unintended alike.
Will lower taxes really pay for themselves by boosting productivity or will they only make the federal deficit worse? Will companies really use a new cash windfall for investment, or continue socking away their record profits? Might a big tax cut for corporations even serve to worsen income inequality between the wealthy and the middle class? And if so, what might be the long-term societal consequences?
No matter what Congress and President Donald Trump do, or don’t do, with corporate taxes, there will be loud opposition. We know companies want to be taxed at a lower rate. Let’s hope, if indeed a big cut is on the horizon, that the net result will be positive not only for them, but for other stakeholders as well.