(8/11) The proposals in the Hamilton paper would raise about 1 pp of GDP in new revenue, and still leave US corporate tax revenues below that of peer nations as a share of GDP. It would close about half that gap.
(7/11) What about competitiveness? US corporations pay very little tax. We are more than 40 percent of the profits of the world’s biggest 2000 public corporations, a much larger share than US GDP in the world, yet we raise much less corporate revenue than peer countries.
(4/11) The corporate tax reaches all of US equity income, including that held by foreigners, tax exempts, or tax preferred accounts.
(1/11) 🧵In my piece in today’s FT, I argue that the corporate tax is an excellent tool for taxing the same wealth that proponents of billionaires’ taxes (or the CA wealth tax) are reaching for. Link at end of thread.
(8/8) Even if half of these measures were adopted, it will improve the US fiscal trajectory a lot, nearly stabilizing debt relative to GDP and lowering interest costs for both the government and households.
Paper link : economicstrategygroup.org/pu…
(7/8) We hope our framework shows how much revenue is on the table in terms of sensible, time-tested, reforms. Such reforms would also collect more from winners in today’s economy (to help fund a strong safety net for others).
(6/8) We also suggest a menu of “sin” taxes and some other revenue buckets (returning some tax policy parameters to earlier levels, incremental individual capital tax measures). Altogether, the menu raises $15t, but we are under no illusion Congress will do all of this.
(4/8) The corporate tax is a better way to tax capital than many, since it doesn’t exempt foreigners, endowments, or retirement earnings. It can reach billionaires, respond to offshoring, and handle the challenge of taxing AI profits, regardless of how that turns out.
(2/8) Spending can also play a role, but we focus on tax. Absent the tax cuts of recent years, there would be a far smaller fiscal problem. And the United States is a low tax country with a high debt burden, compared to our peers.
(1/8) New Paper 🧵! Out today, my piece with @NatashaRSarin out of @AspenEcon on the importance of raising revenue in the time ahead. (As today’s interest rates remind us!) We argue that tried-and-true tax policy choices can meet our extraordinary fiscal moment.
