RESEARCH PAPER - CORPORATE TAX REFORM Assignment

RESEARCH PAPER - CORPORATE TAX REFORM - Assignment ExampleCorporate valuateation revenue share that included total federal tax revenues collapsed (Maples & Graveled, 2011)3. Consequently, federal revenues declined from 28% in 1950s to less than 10 per centum since the 1980s. A big percentage of corporate profits that contribute a big percentage of federal revenue have also followed the same trend of decline.In 1950s, mountain groups paid not less than 49 percent to federal income tax. However, the percentage dropped significantly to entirely 25.3 percent from 1990s. In addition, despite the boom years of the 1990s, share of the US economy remained sharply lower representing only two-fifths of GDP share in the 1950s hence a drop in the federal revenue. Finally, since corporations in America bear the lowest income tax revenue compared to other European countries, United States bore the heavier pith to cater for the deficit in income tax. As a result, federal revenue decreases.Low ering tax range implies a significant increase in the corporate income. Apart from income increase, tax inversion makes it safer to venture into parentage opportunities that organizations regarded as too forged to take. In the recent past, for instance, Endo Pharmaceutical made a bid to purchase Auxilium, a close competitor (Sullivan, 2011)4. Lower tax rates covering mergers and acquisitions influenced Endo Pharmaceuticals to proceed into a risky bid. In addition, if shareholders of a foreign company own only up to 80 percent of its shares, a US corporation enjoys payment of lower tax on subsequent earnings. Such corporations also duck paying taxes to the US on any cash they store outside the country. Consequently, companies easily enter into the market, increase market share, expand the list of therapeutic specialists, and use a single opportunity to reduce their tax rate.Furthermore, with tax reversion, corporations use transfer