Tax expenditures and the complexity of the tax code


in Economics, Politics

One constant in tax policy-making is efforts by organized interests to obtain exceptions from the code. This has become especially pervasive in the U.S. corporate tax system:

America’s corporate tax has two horrible flaws. The first is the tax rate, which at 35% is the highest among the 34 mostly rich-country members of the OECD. Yet it raises less revenue than the OECD average thanks to myriad loopholes and tax breaks aimed at everything from machinery investment to NASCAR race tracks. Last year these breaks cost $150 billion in forgone revenue, more than half of what America collected in total corporate taxes.

(Note that I don’t necessarily agree that corporate taxes in the U.S. are too high, just that the tax code is too complex and favours the politically influential and well-connected.)

{ 0 comments… add one now }

Leave a Comment

Previous post:

Next post: