Research report Mitigating the Potential Inequity of Reducing Corporate Rates
Dan Halperin
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Some tax proposals would reduce the marginal corporate tax rate. Others would boost the top individual rate. Although a differential between corporate and individual rates could reduce the overall tax on distributed corporate income, it could also enable higher-income taxpayers to shelter income from taxation. This paper explains how denying the lower corporate rate to income from services and passive investments combined with provisions that prevent people from permanently escaping tax on retained earnings would mitigate this problem.
Primary topic Business Taxes
Research Area Business Taxes Federal Budget and Economy