if the rate on corporate taxes goes down to 15%. Of course all the current tax preferences will stay around which means the true rate might even be lower than that!!!
That is one of my concerns. Having a corporate tax rate of around 35% is really meaningless. What is important is the actual rate that corporations pay in taxes. How many corporations actually pay 35%? I would opine few to none. You would have to have a pretty cruddy tax attorney to pay that much. So the arguments that our tax rates are too high and that they need to be lowered is independent of the actual tax rates that corporations truly pay. For some large corporations we can drop the tax rate from 35% to 15% and it won't affect them as they already pay less than 15%.
That, I believe is one of the problems with our tax system. We have a tax rate and then a whole bunch of confusing ways of reducing that. It becomes a race of who has the bestest tax attorney.
We need to lower the tax rates of everyone/thing to the appropriate level (TBD) and then remove all the deductions/loopholes so that each entity actually pays the right amount of taxes. Everyone should pay their respective tax rate; not paying their respective tax rate minus what ever they can get away with.
If this new tax rate is too high and is hurting business, then congress can lower it.
If the new tax rate is too low and is hurting governing, then congress can raise it. This would require a separate discipline concerning government spending, but that's a different rant.
But you really should not need a team of tax lawyers to handle something that should be pretty straightforward - if you earn X, you pay Y meaning that
everyone who earns X pays Y. Not just the people that can't afford the bestest lawyer. That, to me, is fair. I would not mind (too much) paying higher taxes if I knew that everyone was paying higher taxes and that everyone that earns the same as I do is paying the same as I do.
It would adversely affect the tax law profession though. Someone always has to lose, it seems.
Our tax laws are getting out of control. I doubt that anyone really understands all of them. The government does not understand the laws and lacks the ability to consistently enforce those laws. Paying taxes becomes a game of chance. What are the chances of you being caught? If you are smart, i.e., hire the bestest tax attorney, pretty low chances of getting caught. I doubt even the tax attorneys understand all of the tax laws.
What good are laws when the citizens and the government don't understand all of them? That should be our first hint that we have too many tax laws and they are too complex to understand.
But the US having too many laws is yet another rant for another thread.