---
title: "How a Carbon Tax Could Save Corporate Tax Reform"
summary: |-
  How can Congress simultaneously reduce the corporate rate and preserve key incentives for innovation without increasing the deficit? By imposing a tax of $25 per metric ton on most greenhouse gas emissions.
date: "2017-08-18"
issues: ["Taxes and Budget"]
authors: ["Joe Kennedy"]
canonical_url: "https://itif.org/publications/2017/08/18/how-carbon-tax-could-save-corporate-tax-reform/"
---

# How a Carbon Tax Could Save Corporate Tax Reform

In prioritizing key elements of tax reform, Republican leaders abandoned plans for a so-called border adjustment tax on imports. It had proved controversial, but it would have raised $1 trillion over 10 years. As Joe Kennedy explains in *The Hill*, this creates a quandary: How can Congress significantly reduce America’s 35 percent corporate rate (one of the world’s highest) and strengthen key incentives such as expensing for capital equipment and the R&D tax credit (which drive innovation, productivity, and competitiveness) without adding to the deficit? The answer is with a carbon tax.

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*Source: Information Technology & Innovation Foundation (ITIF)*
*URL: https://itif.org/publications/2017/08/18/how-carbon-tax-could-save-corporate-tax-reform/*