Political Will for Corporate Tax Reform Reaching Critical Mass

Can reform please corporations and lawmakers and simultaneously boost the economy?

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Some large corporations say they are willing to play ball on trade-offs between tax rates and loopholes. "In fact, we will give up the existing incentives that benefit us if it means getting rid of them all in a simplified, more competitive, and territorial system," Walmart CEO Michael Duke told senators in Wednesday's hearing.

Robert Weissman, president of governmental and corporate watchdog group Public Citizen, believes that tax reform that hews too close to the corporate community's desires could ultimately be meaningless. "I think that [CEOs] mean what they say. I think they're willing to accept a trade of eliminating some tax subsidies in exchange for lowering the rates with a net zero revenue impact or negative impact. Is that for the good of the country? I would say no," he says.

Meaningful reform, says Weissman, would likely be far less palatable to American businesses. "For me, corporate tax reform would mean making corporations pay their fair share and closing unnecessary loopholes. And I don't think there's very much interest in the business community for that at all," he says.

Harris thinks that Washington currently has the stomach to take on this challenge. "I think there's political will right now... I think the ball already has gotten rolling," she says. But she adds that reform could take years, stretching well into Congress's next session. "If tax reform were easy, we would have already done it," says Harris.

Hanlon agrees that reforming the corporate tax code is far more easily said than done: "Everyone agrees on the idea of corporate tax reform. But when you really get into the hard work of finding ways to pay for a lower rate ... a lot more people start to pay attention, and the warm and fuzzy feeling wears off very fast."

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