Scarinci Hollenbeck, LLC
The Firm
201-896-4100 info@sh-law.comFirm Insights
Author: Scarinci Hollenbeck, LLC
Date: March 18, 2015
The Firm
201-896-4100 info@sh-law.comThe nonpartisan think tank is certainly not alone in supporting this reducing corporate income tax rate, as many experts have called for such a change.
The Tax Foundation touted the benefits of lowering the corporate income tax rate shortly after Pres. Barack Obama proposed an overhaul of corporate tax policy. During his State of the Union speech earlier this year, Obama outlined his plan, which would involve closing loopholes in exchange for reducing the top corporate income tax rate to 28 percent from its existing level of 35 percent.
Currently, the U.S. has the highest top corporate income tax rate of any major economy in the world. To pay for this reduction in the top rate, the proposal would eliminate many specific breaks that make it so companies in different industries can skirt taxes.
When the Obama Administration announced the proposal, Treasury Secretary Timothy Geithner elaborated on the policy’s intended outcome, according to U.S. News and World Report.
“We want to restore a system in which American businesses succeed or fail based on the products they make and the services they provide, not on the creativity of their tax engineers or the lobbyists they hire,” he stated, the media outlet reported.
Obama’s proposal has certainly drawn its supporters, who contend reducing the corporate income tax would make the U.S. more competitive, according to the news source. However, some favor a more comprehensive approach, preferring that the federal government opt to eliminate the corporate income tax entirely.
The Tax Foundation has delved into the outcome of scrapping this particular policy, elaborating on how it would affect both business investment and also the size of the economy. In terms of the first benefit, eliminating the corporate income tax would effectively lower the minimum threshold companies need to get an adequate return on investment from purchasing capital equipment.
By reducing this tax, lawmakers would provide companies with greater incentive to invest in new items used for production and running businesses. Providing corporations with this particular motivation could in turn generate a handful of benefits.
If companies began buying more equipment, paying for such items would help circulate money throughout the economy. In addition, it could potentially create enhanced productivity for the firms buying the items by helping their workers get more accomplished with less time and effort.
In addition, The Tax Foundation has asserted that by increasing business investment, eliminating the corporate income tax would spur job creation and push wages higher. By having this positive impact on the labor market and putting more money in people’s pockets through lower corporate income tax rates, the change would enhance federal tax revenue over the long-term.
However, this income would likely shrink in the short-term as the economy adapted to the new policy, The Tax Foundation noted. More specifically, the nonpartisan think tank estimated that scrapping the corporate income tax would cause the federal government to automatically forego $273.5 billion in corporate tax revenue, according to The Washington Examiner.
However, within a time frame of approximately 10 years, the new policy would cause payroll, income and other tax revenues to enjoy a $273.9 billion annual gain, the media outlet reported. If such an increase came to fruition, eliminating the corporate income tax would generate no loss in revenue over the long term.
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Special purpose acquisition companies (better known as SPACs) appear to be making a comeback. SPAC offerings for 2025 have already nearly surpassed last year’s totals, with additional transactions in the pipeline. SPACs last experienced a boom between 2020–2021, with approximately 600 U.S. companies raising a record $163 billion in 2021. Notable companies that went public […]
Author: Dan Brecher
Merging two companies is a complex legal and business transaction. A short form merger, in which an acquiring company merges with a subsidiary corporation, offers a more streamlined process that involves important corporate governance considerations. A short form merger, in which an acquiring company merges with a subsidiary corporation, offers a more streamlined process. However, […]
Author: Dan Brecher
The Trump Administration’s new tariffs are having an oversized impact on small businesses, which already tend to operate on razor thin margins. Many businesses have been forced to raise prices, find new suppliers, lay off staff, and delay growth plans. For businesses facing even more dire financial circumstances, there are additional tariff response options, including […]
Author: Brian D. Spector
Business partnerships, much like marriages, function exceptionally well when partners are aligned but can become challenging when disagreements arise. Partnership disputes often stem from conflicts over business strategy, financial management, and unclear role definitions among partners. Understanding Business Partnership Conflicts Partnership conflicts place significant stress on businesses, making proactive measures essential. Partnerships should establish detailed […]
Author: Christopher D. Warren
*** The original article was featured on Bloomberg Tax, April 28, 2025 — As a tax attorney who spends much of my time helping people and companies who have large, unresolved issues with the IRS or one or more state tax departments, it often occurs to me that the best service that I can provide […]
Author: Scott H. Novak
On January 28, 2025, the Trump Administration terminated Gwynne Wilcox from her position as a Member of the National Labor Relations Board (NLRB or the Board). Gwynne Wilcox, a union side lawyer for Levy Ratner, was confirmed to the Board for an original term in 2021 and confirmed again for a successive five-year term expiring […]
Author: Matthew F. Mimnaugh
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!