Corporate Tax Debate

August 19 - Following both Senator Obama and Senator McCain's proposals to reduce corporate tax rates, think-tanks and pundits have issued different responses.  The Tax Foundation, a conservative think-tank, started a project seeking "to raise the public's awareness of America's high business taxes and how those taxes are affecting our competitiveness, wages, and living standards."  On the other hand, Paul Krugman, a liberal academic and columnist for the New York Times, argues that:

"The thing you have to realize about corporate taxes is that the statutory rate - the rate you pay after allowed deductions and all that - means very little. That's because corporations have lots of potential deductions - and can hire the very best accountants to find them, and lawyers to justify them."

Underlying this entire debate is the GAO's recent report on the rising number of corporations with zero tax liability.