The Corporate Income Tax: A Persistent Policy Challenge

This study traces the evolution of the tax and its features alongside the evolution of ideas and research to the important issues surrounding the corporate tax in the past and whether they inform the present. As the past is examined, certain ideas that tend to be quickly rejected, at least by policy makers, such as making corporate returns public, were not only accepted in the early years, but an important justification for the tax. Some issues, such as revenue, always remain, while others, such as who bears the burden of the tax, moved from uncertain, to settled, to uncertain again. Some, such as the benefit principle of corporate taxation, have become obsolete.

And yet other issues, such as the use of the corporate tax as a shelter from high income tax rates, seem to be ignored in the current debate over the corporate tax rate.