Closing Corporate Tax Loopholes — Can We All Agree This Is A Good Idea?

by Stuart Shapiro

Maybe I’m naive, but the idea that corporations that take jobs overseas should not profit from U.S. tax breaks seems like it would have appeal across the spectrum.  Teabaggers could like it (“less jobs going to foreigners”) and liberals could like it (“evil corporations being punished”).  Well, a bill that would accomplish just that was just introduced in Congress by Congressman Dan Maffei of New York.

[The] legislation would close tax loopholes for companies doing business overseas, and at the same time significantly lower the corporate tax rate for American businesses.

If successful, Maffei’s bill would close corporate tax loopholes that cost American taxpayers an estimated $23 billion per year. The money saved from closing the loopholes would be used to lower the corporate tax rate by about one-third from 35 percent to 23 percent.

Congressman Maffei (disclosure: a friend of mine from graduate school) acknowledges that the bill’s chances of immediate passage are slim but has hopes in the longer run.  A bill like this is a good test of whether our political system works.  Properly explained, I bet it would poll approval ratings in the 70-80% range.  Can the small number of those who would lose from this (corporations with jobs overseas) stand in the way of something with such large benefits to the rest of us.

By: Stuart Shapiro

Stuart is a professor and the Director of the Public Policy
program at the Bloustein School of Planning and Public Policy at Rutgers
University. He teaches economics and cost-benefit analysis and studies
regulation in the United States at both the federal and state levels.
Prior to coming to Rutgers, Stuart worked for five years at the Office
of Management and Budget in Washington under Presidents Clinton and
George W. Bush.