Mihir A. Desai
The U.S. corporate tax code is broken. High rates and perverse incentives drive capital away from the corporate sector and toward other uses and countries. This is bad news for U.S. workers, because corporations aren't making investments that would increase productivity and real wages. And while one might think higher rates lead to higher revenues, the U.S. actually collects less in taxes (as a percentage of GDP) than most other developed nations. Desai, a professor at Harvard Business School and Harvard Law, believes a handful of changes could fix all that. A significant rate reduction and an end to foreign-income tax would encourage U.S. multinationals to keep more money at home. Any revenue lost could be offset by a small tax on noncorporate business income, which is now exempted. Closing the chasm between how income is reported on taxes and earnings are reported to investors would also raise revenue--and end public perceptions of unfairness. These reforms could actually turn the U.S. tax system into an asset. But they won't be effective if managers don't change their mind-set. Rather than shirking their tax obligations, they need to start viewing them as an important social responsibility.
Read the article here.
Read the working paper, "Reinventing an American Corporate Tax", here.
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14 Apr 2014 - Bloomberg
Robert Pozen, senior lecturer at Harvard Business School and former chairman of MFS Investment Management, talks about the U.S. corporate tax system and its impact on the economy. Pozen speaks with Betty Liu on Bloomberg Television's "In the Loop." Maurice "Hank" Greenberg, chief executive officer of C.V. Starr & Co., also speaks.
12 Apr 2014 - Cincinnati Enquirer
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11 Apr 2014 - IndustryWeek
Willy Shih is still worried. Five years ago, the Harvard Business School professor and his colleague Gary Pisano wrote that "restoring the ability of enterprises to develop and manufacture high-technology products in America ... is the only way the country can hope to pay down its enormous deficits and maintain, let alone raise, its citizens' standard of living."
But when IndustryWeek asked Shih to assign a grade to our nation's efforts to reverse the impact of decades of manufacturing offshoring and lost production capability, he answered, "C-."