[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/a/ntj/journl/v71y2018i4p789-806.html
   My bibliography  Save this article

Missing the Mark: Evaluating the New Tax Preferences for Business Income

Author

Listed:
  • Ari Glogower
  • David Kamin
Abstract
The 2017 Tax Legislation introduced two significant new tax preferences for businesses: a reduction in the corporate rate to a flat 21 percent and the 20 percent deduction for pass-through income under Section 199A. Advocates of the legislation justified these preferences in part as a way to encourage new business investment and as a response to international tax competition. However, Congress failed to effectively achieve these goals by appropriately targeting these preferences on an economically coherent category of business income - such as the normal returns to new investment - and by protecting the domestic tax base as they addressed international pressures. Instead, the law extends its tax cuts to a variety of economic returns, including returns to labor of highly-compensated domestic service providers, but only if income is earned in certain forms and in certain sectors of the economy. As a result, the legislation generates substantial new inequity, tax planning opportunities, and administrative challenges for the IRS — none of which was necessary to increase investment and reduce international profit shifting.

Suggested Citation

  • Ari Glogower & David Kamin, 2018. "Missing the Mark: Evaluating the New Tax Preferences for Business Income," National Tax Journal, National Tax Association;National Tax Journal, vol. 71(4), pages 789-806, December.
    • Handle: RePEc:ntj:journl:v:71:y:2018:i:4:p:789-806
    DOI: 10.17310/ntj.2018.4.09
    as

    Download full text from publisher

    File URL: https://doi.org/10.17310/ntj.2018.4.09
    Download Restriction: Access is restricted to subscribers and members of the National Tax Association.
    File URL: https://libkey.io/10.17310/ntj.2018.4.09?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ntj:journl:v:71:y:2018:i:4:p:789-806. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: The University of Chicago Press (email available below). General contact details of provider: https://www.ntanet.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.