As Congress considers tax reform, an important and challenging component is the tax treatment of the corporation. Some proposals would cut the corporate rate by broadening the base, with an overall revenue-neutral treatment of the corporate sector, while others would propose raising or reducing revenues. The traditional arguments surrounding the corporate tax, which largely focus on the distortions introduced by the tax, were a focus of a Treasury study issued in January 2017. This study also discussed choice of organizational form and international issues. The debate, however, has sometimes focused on arguments that cutting the corporate tax rate would stimulate economic growth, and even raise revenue, or on claims that the tax is a burden not on capital but on labor. Recently, Steven Mnuchin, Secretary of the Treasury, advanced the argument that the corporate tax is paid by workers, citing a recent study by Azémar and Hubbard as evidence. A recent news report indicated three additional articles referenced by the Treasury press office in support of the burden falling on wages (although the Treasury Office of Tax Analysis currently assigns most of the burden to capital income): studies by Randolph, Hassett and Mathur, and Lui and Altshuler. Opinion pieces have referenced a variety of other studies that find large effects of corporate taxes on economic growth or that find the burden of the tax falls on wages, while others have expressed disagreement. The current debate is similar to one that began over 10 years ago and might be viewed as the beginning of current proposals to cut the corporate rate and broaden the base. Before turning to the basic issues surrounding the corporate tax, it is useful to trace the discussion of issues and proposals for corporate reform. In November 2005, President George W. Bush's Advisory Panel on Tax Reform reported on a variety of proposals for major reform of the tax system, including those for corporate and business income taxes. Hearings were held on these proposals in 2006, but no further action occurred. On July 16, 2007, The Wall Street Journal published an opinion article by Treasury Secretary Henry M. Paulson addressing concerns that the U.S. corporate tax rate is high relative to other countries and announcing a conference to be held July 26 that would examine the U.S. business tax system and its effects on the economy. The Treasury Department also released a background paper that addressed several issues associated with the corporate tax, and identified some base broadening provisions. An opinion piece by R. Glenn Hubbard, President Bush's first chairman of the Council of Economic Advisors, referred to the conference as well as to a study by Hassett and Mathur finding that the tax fell on labor and a study by Devereux considering the revenue-maximizing tax rate. Hubbard concluded by suggesting that cutting the corporate tax rate would reduce a tax that is largely, or even fully, borne by labor and that behavioral responses would offset much of the static revenue cost. During the conference, discussions included whether business representatives would trade tax preferences for lower rates, whether reform should take the form of lower rates or write-offs of investments, and methods of avoiding the corporate tax by income shifting in a global economy. Some participants complained that the corporate tax is outdated, too complex, distorts decisions, and undermines the ability of firms to complete in a global economy. Echoing some issues raised in Hubbard's article, Kevin Hassett indicated that the corporate tax was not an effective way to raise revenues and suggested that lowering the rate would raise revenues. At the time of the Treasury conference, Chairman Charles B. Rangel of the House Ways and Means Committee released a statement inviting the Bush Administration to discuss such issues as tax reform, especially the Alternative Minimum Tax (AMT), addressing tax havens, and increasing equity and fairness in the tax structure. Chairman Rangel introduced a bill, H.R. 3970 , on October 25, 2007, with a revenue-neutral subsection that included some of the base broadeners included in the 2007 Treasury study. The rate reduction, from 35% to 30.5%, was not as large as that discussed in the 2007 Treasury study, 27%. Base broadeners in H.R. 3970 were criticized by some business groups. The corporate tax debate and the issues of burden and effects on growth continued to be in the news. In May 2008, N. Gregory Mankiw published an article suggesting that most of the burden of the tax falls on labor, and citing research suggesting the corporate tax is borne by labor and that revenue losses may be fully or largely offset by behavioral responses. In the 111 th Congress, S. 3018 , introduced by Senators Ron Wyden and Judd Gregg, also provided for a lower corporate tax rate in exchange for a somewhat broader corporate tax base. A similar bill, S. 727 , was introduced by Senators Wyden and Coats in the 112 th Congress. The Fiscal Commission proposed a corporate reform similar to the Wyden-Gregg bill. In addition to the Wyden-Gregg and Wyden-Coats proposals and the Fiscal Commission proposals, there were general proposals by Republican leaders in the House (Majority Leader Eric Cantor, Ways and Means Chairman Dave Camp, and Budget Committee Chairman Paul Ryan) for corporate tax reform with rate reductions. In 2014, Chairman Camp introduced H.R. 1 , a comprehensive proposal that reformed both individual and corporate income taxes and was revenue neutral during the 10-year budget horizon, as well as distributionally neutral. It cut the corporate tax rate to 25%. President Obama also supported revenue-neutral corporate tax reform, although some groups proposed raising additional revenue from corporations. During 2016, Senator Hatch, chairman of the Senate Finance Committee, indicated an interest in corporate tax integration (where only one level of tax would be imposed on corporate income). Most recently, Speaker Paul Ryan and Ways and Means Committee Chairman Kevin Brady proposed a major revision in the tax treatment of business income in their "Better Way" blueprint. It partially transformed the current income tax into, effectively, a domestic consumption tax. The border adjustments that make this proposal a domestic consumption tax appear no longer on the table and a new plan is being formulated in cooperation with the House, Senate, and Administration. This report provides an overview of corporate tax issues and discusses potential reforms in the context of these issues, with particular attention to some of the research concerning large behavioral responses and their implications for revenue and distribution. The first section reviews the size and history of the corporate income tax, and discusses an important issue that has been given little attention by those who propose deep cuts in the corporate tax: its role in preventing the use of the corporate form as a tax shelter by wealthy business owners. This section also discusses the potential effect of behavioral responses on corporate tax revenues. The second section examines the role of the corporate tax in contributing to a progressive tax system and discusses claims that the burden falls on workers. The third section reviews arguments relating to efficiency and revenue yield, and traditional criticisms of the corporate tax as one that causes important behavioral distortions. One aspect of this discussion is the question of how the tax might be viewed differently in a more global economy. The final section examines options for reform. The corporate tax is the third-largest source of federal revenue, but its importance as a revenue source has diminished considerably over time. Despite concerns expressed about the size of the corporate tax rate, current corporate taxes are extremely low by historical standards, whether measured as a share of output or based on the effective tax rate on income. In 1953, the corporate tax accounted for 5.6% of GDP and 30% of federal tax revenues. In recent years, the tax has fluctuated at around 2% of GDP and 10% of revenues, reaching a low of 1.2% of GDP in 2003, and standing at 2.7% in 2006 before falling as a share due to the recession and certain measures to stimulate the economy. The tax is projected to subsequently raise revenues of 1.6% to 1.7% of GPD for the years 2016 to 2027. Today, it is the third-largest federal revenue source, lagging behind the individual income tax, which is 8.4% of GDP in 2016, rising to 9.7% in FY2027, and the payroll tax, which was about 6% of GDP. It is much more significant, however, than excise taxes, which are slightly over 0.5%, and estate and gift taxes at less than 0.12%. In FY2017, the corporate tax is estimated at 9.4% of revenues, falling to 8.5% by FY2027. Much of the historical decline arises from legislated reductions in the corporate effective tax rate on the return to new investment, which has fallen from 63% of corporate profits in 1953 to about 20% today. These changes include a reduction in the top statutory rate from 52% to 35%, more liberal depreciation rules, and the growth of tax favored intangibles investments. The total tax burden on corporate source income has declined even more due to lower rates on dividends and capital gains at the shareholder level and the increased fraction of stocks held in tax exempt form. While a large fraction of the decline in corporate tax revenues is associated with these changes in rates and depreciation, other causes may be more liberal rules that allow firms to obtain benefits of corporate status (such as limited liability) while still being taxed as unincorporated businesses and tax evasion, particularly through international tax shelters. The 2007 Treasury study documented the significant rise in the share of total business net income received by unincorporated businesses from 1980 to 2004, from 21% of total net income to 50%. Whereas the share of proprietorships (which have no limited liability) has declined slightly, from 17% to 14%, the share of Subchapter S firms (firms that are incorporated but are allowed to elect taxation as an unincorporated business) rose from 1% to 15%. These changes followed a dramatic increase in the number of shareholders allowed for the election (the limit of 10 was raised to 35 in 1982, to 75 in 1996, and to 100 in 2004).