During the session on business taxation at the National Tax Forum in 2011, little consensus emerged between business representatives and union leaders on the reformations that should be made to the business taxation system. One proposal that greatly divided opinion was a reduction in the corporate tax rate. In this article, it is argued that changes in the treatment of tax losses and the introduction of a well-designed allowance for corporate equity represent a better business tax reform strategy than cutting the corporate tax rate.
He concludes with:
In conclusion, we now have a much clearer picture of the potential impact of the patchwork economy than we had at the time of the release of the ATFS Report. This picture provides a more compelling case for the introduction of an ACE and for changes in the treatment of losses rather than for a reduction in the corporate tax rate. Importantly, such business tax reforms might play a crucial role in eliminating the temptation to return to the old and very inefficient method of providing direct support to industries that are struggling.
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