- June 28, 2021
- Posted by: Stratford Team
- Category: Business
The Tax Cut and Jobs Act (TCJA) of 2017 created the most substantial changes in business taxation in decades. But in a new analysis, published in today’s issue of Tax Notes and cowritten with my Tax Policy Center colleague Claire Haldeman, we find that, while the law promoted efficiency by reducing the level and dispersion of marginal effective tax rates on new investments, it also included many poorly designed provisions, especially in the treatment of income by multinational corporations and pass-through businesses such as partnerships. We propose several ways to fix these problems, in some cases reforming the changes and in some cases going back to the old, pre-TCJA approach.
The TCJA created a 20% deduction for certain forms of income earned through unincorporated businesses, cut the corporate income tax rate from 35% to 21%, and made a variety of changes that shifted the tax base toward cash-flow taxation for both corporations and…