WASHINGTON, Dec. 3, 2013—Washington D.C. is abuzz with the possibility of corporate tax reform. Years of intense lobbying from corporate executives have convinced many in Congress and the White House that a 35 percent tax on corporate profits represents a competitive threat to American businesses and to the economy. Rep. Dave Camp (R-MI) and Sen. Max Baucus (D-MT), respective chairs of the two powerful congressional tax writing committees, have joined President Obama in calling for closing corporate tax loopholes and using the proceeds to reduce the tax rate on corporate profits. But a study just released by the Center for Effective Government shows that the taxes corporations pay on profits are historically quite low. Moreover, there is no evidence that lowering taxes on corporate profits will lead to more job creation in the U.S.

Observers have low expectations of the special House-Senate committee set up to craft recommendations for a long-term fiscal deal to replace the next nine years of so-called "sequestration" (automatic and indiscriminate budget cuts). Those recommendations are due by Dec. 13. The committee met for the first time last week, with Republicans publicly opposed to tax reforms that could generate more revenue and Democrats rejecting a spending cuts-only approach. But some think a smaller deal could happen to replace a year or more of sequestration, involving more "federal user fees" as a modest way to generate more funding.