Washington, D.C. — As lawmakers debate new legislative relief packages to support businesses and the economy, a new column from Center for American Progress senior fellow Kimberly Clausing identifies three principles for an efficient and effective business tax system.
In creating tax policy during this unprecedented crisis, policymakers must assess the need to assist businesses who are facing serious liquidity issues in a time of crisis against a business tax system that was already ill-suited to revenue, equity, and efficiency aims.
Clausing’s three principles for an efficient and effective tax system in the time of coronavirus are:
- Principle 1: Business assistance should help companies facing temporary liquidity issues due to the coronavirus crisis.
- Principle 2: Business tax cuts should be carefully targeted and explicitly temporary.
- Principle 3: After the crisis, the corporate tax needs to be stronger.
“It is reasonable for taxpayers to assist businesses in times of duress, but more should be expected from highly profitable companies—both now and in the future,” said Clausing. “The unfortunate reality is that before the pandemic, many U.S. businesses were already paying less in taxes than similar companies in peer nations—and less than they had historically. During this time, corporate tax cuts need to be targeted and temporary, and post-crisis, the corporate tax needs to be stronger.”
Read the column: “Business Tax Principles for Economic Recovery in the Time of Coronavirus” by Kimberly Clausing
For more information or to speak to an expert, please contact Julia Cusick at gro.ssergorpnacirema@kcisucj.
To find the latest CAP resources on the coronavirus, visit our coronavirus resource page.