Why It's Hard to Take the RATE Coalition Seriously on Corporate Tax Reform

Elaine Kamarck and James Pinkerton both built careers in public policy as serious thinkers who weren't easy to peg ideologically and seemed unbeholden to any narrow ideology or interest group. Whether you agreed with them or not, they at least were interesting and independent. 

That was then. These days, Kamarck and Pinkerton are working with big business as co-chairs of the RATE Coalition, a 501(c)4 organization dedicated to corporate tax reform -- but which makes such patently simplistic arguments in this area that it's hard to fathom how two smart people like Kamarck and Pinkerton would lend their reputations to the enterprise. 

Corporate taxes are a complex subject and, to be taken seriously on this topic, it helps to acknowledge this complexity. The basic argument of the RATE Coalition -- as the name implies -- is that the U.S. corporate tax rate is too high and that this undermines U.S. competitiveness and growth. As well, the RATE Coalition argues that various corporate tax breaks distort economic activity and hurt the U.S. that way, too -- a double whammy. The solution they propose is to lower rates and close loopholes to achieve revenue-neutral reform. 

This is not a novel argument, of course. The Simpson-Bowles Commission made the same argument and the Obama Administration itself has called for reform along these lines. For sure, there is much to be said for a more streamlined corporate tax system which grants few special perks. 

But what's problematic about the RATE Coalition's arguments -- as presented on their website and various materials, including a recent letter by 20 economists -- is that it doesn't acknowledge basic facts about U.S. corporate taxes. 

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