Corporate tax code unlikely to change

WASHINGTON -- The Treasury Department released a long-awaited study Thursday on overhauling the corporate tax code that detailed several options but made no recommendations, possibly signaling the Bush administration's intention to not push for changes in the president's final year.

The 116-page report laid out broad approaches to policy and discussed advantages and shortfalls to various corporate tax proposals.

Treasury officials, however, said they did not expect any legislation to get through Congress next year given the complexity of the issue and the fact that President Bush will be in his final year in office.

One of the approaches discussed in the report would lower the current corporate tax rate of 35 percent to 28 percent by eliminating various business tax breaks. The study said the rate could be lowered to 31 percent if a decision was made to retain the current tax break for accelerated depreciation of business investments.

Another approach examined in the report would replace the current corporate income tax with a business activity tax which would be similar to a consumption tax on businesses. The report also devoted attention to looking at how specific questions could be addressed such as the current system of taxation of corporate profits.

The review of corporate taxes was launched earlier this year by Treasury Secretary Henry Paulson, who has complained that current corporate tax rates are too high and are hurting the competitiveness of U.S. firms in the global economy.