Former Treasury Secretary Lawrence Summers called for a "comprehensive'' overhaul of U.S. corporate taxes to counter slowing revenue from business levies, Bloomberg News reported Tuesday.
"If nothing else, policy makers should patch the existing business tax system by eliminating abusive tax shelters and closing other loopholes,'' Summers wrote in a policy paper with Jason Furman and Jason Bordoff, according to Bloomberg News. "An even better approach would be comprehensive reform of business taxation.''
While the U.S. has the second-highest corporate tax rate of the 30 countries in the Organization for Economic Cooperation and Development, it has the fourth-lowest revenue from the levies as a share of the economy, the paper said, according to Bloomberg News. A "large part'' of the disparity is that companies are increasingly reporting different incomes to their shareholders and to tax authorities, it said.
Increased revenue would help reduce the government's budget deficit, allow for lower corporate tax rates and help reduce widening income inequality, the authors wrote, according to Bloomberg News. They also advocated letting the 2001 and 2003 tax cuts on individuals expire as scheduled in 2010 and instating a new inheritance tax on the wealthiest households.
The paper, released Tuesday, was published by the Hamilton Project, a Brookings Institution initiative in Washington started by Democrats including former Treasury Secretary Robert Rubin. Furman is the project's director and Bordoff is policy chief, Bloomberg News reported.-New York State Society of Certified Public Accountants
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