Overview
Law360 quoted George Callas in an article titled "Corp. Tax Rates In Political Sights Amid Presidential Race." The article, published February 24, discusses how some of the world's largest corporations are finding their financial statements under unwelcome scrutiny as activists – and candidates in the 2020 presidential race – claim they reveal low effective tax rates and loopholes in the system. As companies push back, some tax experts fret that this measure of corporate effective tax rates is an oversimplified metric that avoids trickier questions about how to define and tax corporate income. And this new emphasis has pushed some politicians toward misguided new proposals to tax companies based on their financial books rather than their tax returns, critics claim.
Callas states that as lawmakers looked for ways to pay for the Tax Cuts and Jobs Act's drastic cut in the corporate tax rate, they gravitated toward policies that would raise revenue while limiting the impact on book taxes. "All else being equal, Congress believed it would face more opposition to a $100 billion revenue raiser that increases book-effective tax rates than a $100 billion revenue raiser that leaves effective tax rates unchanged," Callas says. "But companies are paying the government $100 billion either way."
The full article can be read at Law360 (subscription required).