I am unfortunately skeptical of the current corporate tax reform process in Washington. At minimum, we should end up with a statutory rate at the OECD average of 25% with fewer tax loopholes/breaks/deductions.
But congressional tax writers are having a hard time getting anywhere close to that number without harmful gambits such as “paying” for the rate reduction by a slowdown in depreciation deductions. Not only does such a plan take with one hand what it gives with the other, but it penalizes new investment in favor of old. And if the rate can’t be lowered close to the OECD average, the whole process is likely to collapse anyway as Corporate America passes.
So maybe it’s time to give up on tinkering. Maybe it’s time to just scrap the corporate income tax. Matthew Yglesias: