Published in 146 Tax Notes 91 (2015).


This brief essay explains what the stakes are for corporate tax reform and why such reform is more politically feasible than most observers believe. The largest conceptual impediments to corporate tax reform are international tax design and the fact that a large fraction of U.S. business income is earned by unincorporated businesses. In response, the essay demonstrates that a framework has emerged with respect to the former that can serve as the basis for constructive negotiations. The essay further lays out a novel strategy for dealing with unincorporated businesses in corporate tax reform, which is to construct a corporate tax rate schedule sufficiently inviting that pass-through businesses will be encouraged to incorporate. Finally, the paper argues that inevitable revenue shortfalls can be plugged by general limitations on the deductibility of business interest expense, which are conceptually desirable in any event.


Business Organizations Law | Law | Law and Economics | Tax Law

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