Structural Problems with the Current Corporate Income Tax
The corporate income tax was created in 1909 as a means to tax the rich. However, unintended consequences occurred and the corporate income tax became a means by which the rich avoided taxes. The corporate income tax has several loopholes which allow corporations to pay hardly any income tax. As a result, federal revenues have been on the decline since 1950 and the corporate income tax currently brings in less than 7 percent of federal revenues. Loopholes are not the only explanation for the decreasing revenues. High corporate tax rates in the U.S. are triggering relocation abroad where tax rates are significantly lower. Unless a proposal for reform is adopted shortly, revenues will continue to dwindle and U.S. companies will continue to relocate abroad, reducing the number of jobs available in the U.S.