America's corporate tax code is a mess.  At 39%, our top tax rate is among the highest in the world, but loopholes mean that many companies pay nothing.   High corporate tax rates encourage cheating.   Small companies under-report their income, while large companies exploit loopholes.   As a result, mid-sized companies, which are too big to risk overt non-compliance and too small to lobby for loopholes, bear the burden.  Perhaps worse, the whole system creates a culture of corruption.   Politicians who help create loopholes raise more money than those who do not.  Companies that invest in dodging taxes have lower costs than those that do not.  Already, companies spend more than $100 billion annually to comply with taxes, and are steadily increasing spending on lobbying.

Hope Street Group recommends a straightforward action plan:

• 1) Expose -- The Government Accountability Office (GAO) should establish a program to track and publicize all business tax expenditures and outright subsidies;
• 2) Target -- Establish a bi-partisan Corporate Tax Commission to meet annually to review and recommend elimination of up to $150 billion in annual favoritism; and
• 3) Redirect -- Upon approval of the Corporate Tax Commission's recommendations, the corporate tax rate should be lowered to make the reform budget neutral in the first year, with the possibility for using future reforms to reduce the deficit.

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