Base-broadening corporate tax reform
Both candidates have roughly similar corporate tax plans that broaden the base and lower the rate (while protecting the R&D credit). Governor Romney proposes reducing the corporate rate to 25% and President Obama proposes a slightly smaller reduction to 28%.
While lower rates and broader bases are often praised by tax analysts, some including Larry Summers have been skeptical in the past. A primary concern is that leveling the playing field – that is lowering rates of corporate taxation by getting rid of deductions such as accelerated depreciation – can put more of the burden on new investments rather than existing capital, which can reduce the attractiveness of new investment.
But Alan Auerbach recently offered a proposal for a…
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