In September, I wrote in the Washington Post about the difficulties of achieving corporate tax reform—specifically, how you could not realistically reduce the rate from 35% to 25% on a revenue neutral basis. The Joint Committee on Taxation recently released a report that confirms my analysis.

Back in September, I wrote:

[The] chances of this proposal passing Congress on a revenue-neutral basis are slim. Most of the corporate tax benefits that would need to be repealed have both a significant positive effect on economic growth and deep political support among powerful constituencies. Moreover, repeal would hurt many non-corporate entities, such as local governments and partnerships running operating businesses, that would gain nothing from a lower corporate tax rate.

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The biggest portion of tax benefits to be eliminated, more than $200 billion over five years, encourages U.S. companies to expand their activities in the United States — just what we need in these slow economic times.

Examples include: ●$109 billion for accelerated depreciation that encourages U.S. corporations to buy machinery or equipment. ●$62.4 billion for U.S. corporations that locate their manufacturing facilities here, rather than abroad. ●$43.4 billion for U.S. corporations that increase their research activities and expense their experiments.

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Of course, a compromise could be reached by lowering the corporate tax rate to 30 percent and retaining half of the current tax benefits for U.S. corporations. In a recent Grant Thornton survey, however, most corporate executives said that they would be unwilling to give up their tax credits and deductions unless Congress reduced the corporate tax rate to 25 percent or lower. 

 Yesterday, the Joint Committee on Taxation released a report that agrees with my math. Even if you cut all the deductions, you can’t get to that magic level of 25%.

The study by the Joint Committee on Taxation found that erasing corporate deductions and credits would save around $960 billion over the next decade, only enough money to lower the top rate to 28 percent. The current top rate is 35 percent.

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Democrats who requested the study said it shows that to reduce the rate further, the GOP could have to raise the tax burden on individuals or small businesses, or rely on unrealistically optimistic projections of federal revenue.

“The Republican tax plan would require wiping out every provision in our tax code that encourages domestic job creation, investment and innovation — and they are still 3 percent short of their goal,” said Rep. Sander Levin of Michigan, top Democrat on the tax-writing House Ways and Means Committee. He said the study underscores the need to “look at the disturbing implications of what is being proposed.”