Why so much current talk about tax reform?

Jim GouldTucker Shumack

Sense that our corporate tax system is uncompetitive

• US corporate rate: 35% vs. Average OECD Rate: 26%

• US worldwide system vs. territorial system of most of our major trading partners

Sense the tax code is cluttered and inefficient

• 1987: 128 items on tax expenditure list• 2010: Over 200 items on tax expenditure list

• 1998: 45 temporary tax provisions• 2010: 147 temporary tax provisions

Concern that too many people are exempt

1985: Approximately 20% of individuals paid no income tax

2010: Approximately 50% of individuals paid no income tax

Concern that the high-bracket taxpayers have made out too well

• Top income tax rate: 39.6% in 2000; 35% now

• Rate on capital gains: 20% in 2000; 15% now

• Rate on dividends: 39.6% in 2000; 15% now

• Estate tax: 55% in 2000; 35% now

Concern that the tax system raises too little revenue

• 2010 federal revenue: 14.9% of GDP

• Average federal revenue last 40 years: 18% of GDP

• 2000 federal revenue: 20.6% of GDP