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TAX BREAKS AREN'T FREE
July 24, 2007
The Treasury issued a paper yesterday raising a point too often forgotten in tax policy: targeted tax breaks are expensive.
The report listed some tax breaks that, if eliminated, would allow the top corporate tax rate to be cut to 27%, from the current 35%, with no revenue loss. They are listed below, along with their 10-year revenue impact:
Source: U.S. Treasury. Click to enlarge
The most expensive break is the relatively new Section 199 deduction, followed by the break for muni bonds and the research credit. A lower rate would fund a lot of research.
The TaxProf has a roundup.
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