How Mark-to-Market Taxation Can Lower the Corporate Tax Rate and Reduce Income Inequality

Abstract

Democrats and Republicans agree that the U.S. international tax system needs fixing, and the U.S. corporate tax rate is too high. Americans across the ideological spectrum see income inequality as a big problem.

Reducing income inequality can allow a reduction in the corporate tax rate and help fix the international tax system.

If a mark-to-market tax is imposed on the publicly-traded securities and derivatives of the 0.1% wealthiest and highest-income families, and the revenue used to reduce the corporate tax rate on publicly-traded U.S. corporations, then all publicly-traded corporations could benefit, private businesses would be unaffected, and upper-tier income inequality would be meaningfully diminished.

Keywords: corporate taxation, income inequality, wealth inequality

JEL Classification: D31, D63, E62, H20, H23, H24, H25