Tax Reform Is More Than Just the Rate

Tax policy is almost always a balancing act between the rate and the base. A good balance between the two is generally a low rate paired with a wide base. This was part of the design of the 2017 Tax Cuts and Jobs Act (TCJA).

The TCJA lowered the corporate tax rate from 35 to 21%, but it also expanded the corporate tax base through a number of domestic and international provisions. This combination allowed companies of all sizes to grow, create more jobs, and innovate more effectively. Despite this, there are growing calls to raise the corporate tax rate again. But because the corporate tax base is so much broader now, raising the rate will increase the overall burden more in 2025 than it would have before the TCJA.

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