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September 18th, 2019
Technology • Legitimacy

US corporate income tax reform through TheChisel

In late 2015, Eric Toder of the liberal thinktank, the Urban Institute, and Alan Viard of the conservative thinktank, the American Enterprise Institute, drafted a joint proposal on how to reform federal corporate income tax in the US. Representing two prominent US institutions from opposite sides of the political debate, they launched their proposal on in January 2016 to reach bipartisan public support. TheChisel is an online platform that allows US citizens to engage in public policymaking with experts from nonpartisan organisations and bipartisan coalitions. Online participants can comment and vote on expert proposals, which are revised to build consensus. Once a majority vote is secured, TheChisel helps send a final proposal to Congress.

It was broadly accepted by politicians, economic analysts, and the media at the time that the US corporate income tax system was flawed.[1][2] However, there was disagreement over how to solve this complex policy challenge and concern that the measures under consideration by congressional leaders would be counterproductive.[1]

US corporate income tax policy is a complex area. Toder and Viard's first task was communicating the issue in a way that was easy for the non-expert reader to understand and provide sufficiently detailed and balanced information to allow citizens to engage in deliberation and reach informed judgements on potential solutions. They next presented a solution on TheChisel platform, outlining what the proposed action was and predicted outcomes. This proposal eliminated the highest statutory tax rate of 35-39 percent and added USD170 billion annually to the federal debt (for a net present value of USD1-1.5 trillion in federal debt over time).[3] This proposal was then presented for online debate and voting.

An estimated 500 members of the public participated in discussing the issue, commenting and voting on the online reform proposal. Levels of support for the proposal among the population were analysed in terms of demographic information and participants' political orientation, and compared with those of the general US population.[3] The initial proposal was rejected by online participants due to the unacceptable level of debt. Eric Toder and Alan Viard revised their reform suggestions by modifying the transition period, capturing taxes on profits housed offshore, maintaining revenue neutrality, and reducing corporate income tax to 15 percent. Following these changes, a second online vote was held and consensus was achieved, with a majority of both liberals and conservative public participants supporting the proposal.

Ultimately, the proposal was overtaken by events in Congress in December 2017 where legislation was enacted that reduced corporate income tax from 35 percent to 21 percent, a measure that was estimated to add USD1 trillion to the national debt.[4] Top officials from the Commerce Department and Treasury Department have commented that the proposal developed through TheChisel offered a better solution than the one enacted.  

The initiative

In response to the challenges presented by the corporate income tax system, two experts organised an initiative utilising an online platform called The experts sought to represent all sides of the debate and identified two broad positions aligning with left and right thinking on the issue. They are two highly-respected corporate income tax experts, who represent opposing political ideologies, but came together to develop materials and an initial plan: Eric Toder of the liberal thinktank, the Urban-Brookings Tax Policy Center, and Alan Viard of the conservative American Enterprise Institute. 

Stage 1. The Issue and the Solution

Defining the Issue

Toder and Viard worked with TheChisel to define the issue by:

  • Developing material that communicated vital information about the corporate tax system in a way that was easy to understand, simple, and engaging, such that both sides could agree that the information collected was salient, accurate, and accessible
  • Posting online on the specific problem definition, a glossary of key terms, and data visualisations and illustrations of contextual background information to educate the public at large on the most important common ground facts about US corporate income tax 
  • Posting their proposed solution in an easy-to-understand fashion with attendant budgets, rollout plans, and expected results (both economic and social).

The experts outlined the most salient points required to understand the problem's contextual background and posted the following information on

  1. The US has the highest statutory corporate tax rates among developed countries at 35-39 percent
  2. The current US tax system encourages companies to invest, book profits, and move charters abroad 
  3. The double taxation built into the current corporate income tax is a vestige of the past 
  4. The current tax system treats companies unequally, based on financing and organisational structure.
  5. Other reforms now being considered do not adequately address the current system's harmful effects 
  6. Key terms and definitions.[3]

For those wanting additional information, each of the key facts was illustrated with a data visualisation, chart, graph, image, video, or elaborating text. The summaries and illustrations allowed journalists, educators, and the public at large to review and rely on the materials presented as appropriately vetted and rigorous. Primary sources for this information were made available, and the experts jointly curated links to other reference materials for those wishing to explore the issue in greater depth. In addition, all materials presented were vetted by multiple groups of 10th graders (American high school students) for ease of understanding, clarity, and flow prior to posting on TheChisel.

The Solution

The experts' jointly developed initial solution proposed:

  1. Eliminating corporate income tax (highest rates of 35-39.6 percent)
  2. Taxing shareholders at ordinary income tax rates on dividends and accrued capital gains
  3. Establishing transition arrangements
  4. Addressing the proposal's revenue shortfall.

TheChisel's guided framework asked the experts to enumerate the expected results (economically and socially) of their joint proposal and establish a budget. They anticipated the following outcomes:

  1. Companies would no longer have a tax incentive to move their charters abroad
  2. Investment in the US would increase
  3. Tax treatment would be more equal for companies with different financing and organisational form
  4. The plan would cost around USD170 billion per year, with a net present value of USD1-1.5 trillion addition to the federal debt.

All the information provided in Stage 1, the Issue and the Solution was jointly agreed by the experts. Some direct sources or “go deeper” sources may have had an ideological left- or right-leaning bent, but the experts jointly determined that the data or presentations were rigorous and worthy of inclusion.[3] The two experts and TheChisel shared the proposal with friends, family, colleagues and interested groups. The plan was also used for educational purposes at George Washington University by economics professor Joann Weiner.[6]

Stage 2. Join the Conversation and The Vote (iterative)

Citizens were invited to review the information and proposed solution. Using TheChisel's online discussion forum, members of the public could engage with each other and with the experts by:

  •  Asking questions to seek clarification
  • Making suggestions to improve the proposal
  • Sharing personal stories relating to their experiences with the issue.

Around 500 people participated in the online discussion and vote. Participants were recruited through TheChisel's e-newsletter and mailing lists. Information about the demographics and the political orientation of participants was gathered, and this information was used to model the likely levels of support for the proposal across the US population. 

Following the discussions, members of the public could vote on whether they found the proposed solution acceptable. In order for the proposal to pass, it needed to acquire a majority of support from each constituent group. There were an estimated 102 typed responses posted publicly on TheChisel, averaging 110 words each, 192 votes (up or down) on comments, and 400 votes on the final proposal captured privately on TheChisel. It should be noted that the public cannot see how anyone has voted nor can they see votes in progress - this is to avoid confirmation bias. 

Of the 102 comments posted on the site, 78 were questions and answers between public individuals and the two experts Toder and Viard; 21 were public individuals' suggestions and the experts' responses; and 7 were personal stories from individuals.

The initial proposal developed by the experts was rejected in the first round of voting. It received only minority support from liberal and conservative segments, although support was slightly higher among conservatives. Comments revealed that the main reason the public rejected the proposal was the fact that it was not “revenue-neutral”: while it reduced the corporate tax rate, it would also have incurred more than USD1 trillion in additional debt over time, which most voters deemed unacceptable. It should be noted that only the experts can make direct revisions to a proposal on the platform.

In response to this public pushback, the experts revised their proposal in June 2016. The revised plan called for:

  1. Reducing the highest corporate income tax rate to 15 percent
  2. Taxing shareholders at ordinary income tax rates with credit for corporate income taxes paid
  3. Smoothing accrued gains and losses to reduce tax volatility
  4. Providing transition relief for privately held companies that go public
  5. Exempting small shareholders from taxes on dividends and capital gains
  6. Imposing a 15 percent tax on the interest income of non-profit organisations and retirement plans
  7. Establishing transition arrangements.

The experts revised their expected results, reaching the following conclusions:

  1. Companies would have little tax incentive to move their charters abroad 
  2. Investment in the US would increase 
  3. Companies would book additional profits in the US 
  4. Tax treatment would be more equal for companies with different financing and organisational form 
  5. The proposal would not open up new opportunities for tax avoidance 
  6. The tax system would become slightly more progressive.
  7. The Urban-Brookings Tax Policy Center estimates the plan would be approximately revenue-neutral in the long run; it could even raise revenue if it takes into account the taxes collected on the additional profits that are likely to be booked into the US in response to a reduced corporate tax rate.[3]

As a result, the votes changed such that the majority in the relevant constituent groups (in this case liberal and conservative groups) of the population supported the proposal. It received majority support among both liberal and conservative segments of the participants, with the rate of support among conservatives being slightly higher than the rate of support among liberals. The process took only one iteration with this fundamental change.

The challenge

At the time of the initiative, the US had the highest statutory corporate tax rates in the developed world, yet collected less corporate tax revenue as a share of gross domestic product than many of its trading partners. It has been argued that the tax encourages companies to invest, book profits, and move charters abroad. The tax also discourages firms from investing in the US, and enables multinationals to avoid tax by shifting profits to low-tax countries. In the years leading up to this initiative, Congress had hosted several tax reform discussion drafts, and in the 113th Congress (2013-2014) the Tax Reform Act of 2014 proposal was considered, which would have made substantial changes to corporate income tax and the treatment of multinational corporations.[5

Many of the options that were being considered included either raising or removing US taxes on foreign profits earned by US companies.[3] It was argued that these proposals were counterproductive: while they addressed some elements of the problem, they also generated perverse incentives, one approach involving raising US taxes on foreign profits earned by US companies.[2] This would reduce the incentive to invest and book profits abroad, but would increase incentives to invert to foreign charters. Alternatively, removing US taxes on foreign profits of US chartered companies would reduce the incentive to invert to foreign charters, but would increase incentives to book profits abroad.[2][3

The public impact

The initiative was overtaken by policy developments. In December 2017, US Congress and President Trump enacted legislation lowering the corporate income tax rate from 35 percent to 21 percent as part of a tax rate cut estimated to add more than USD1 trillion to the federal debt.[3

However, feedback on the proposal and the process was highly enthusiastic:

  • Organisers of the initiative claimed that key officials from the US Commerce Department and Treasury Department have commented that the proposal developed through TheChisel was a better solution to the problem than the one enacted in 2017, and expressed a desire to apply some of the elements of this proposal in future legislation
  • John Arnold (conservative), a Texas hedge fund manager and philanthropist, tweeted that “the most thoughtful plan to reform US corporate tax is now also the best presented”[7]
  • Several articles in major publications outlined the new proposal[8][9]
  • Experts received additional funding to continue their studies.

As a result of seeing the proposal, Ann Ravel, a liberal and former chair of the US Federal Election Commission, introduced TheChisel to a conservative organisation keen on campaign finance reform. TheChisel matched the organisation to a liberal organisation and created a new bipartisan proposal for Campaign Finance Reform - “Counter Big Donor Influence with Small Donor Tax Credits” - made jointly by US PIRG (Public Interest Research Group) and Take Back Our Republic. Her response was that “TheChisel is one of the most innovative and promising initiatives I've ever seen to achieve change and to change the polarisation in this country.” Subsequently, new pairs of opposing thinktanks have come together and developed joint proposals on TheChisel, including Peel Back Farm Subsidies developed jointly by US PIRG and the National Taxpayers' Union Foundation.

Written by Martin King

Stakeholder engagement

The two primary stakeholder groups in the initiative were identified as liberal and conservative US citizens. As a first step, the initiative brought together highly regarded experts from opposite sides of the political debate, who reached agreement on the salient facts of US corporate income tax in developing a bipartisan reform proposal. [9] 

The public engagement stage then allowed different sections of the population, defined by demographic data and self-identified political orientation, to comment on and debate the proposal online. In a first vote they rejected the initial proposal, which led to substantive revisions. While a total of approximately 500 stakeholders were engaged in the development of the final reform proposal, no information on participants (e.g. educational background, home state, or age) is publicly available. The acceptability of the final proposal was made dependent on a majority vote among both liberal and conservative segments of the participants. Yet, it is unclear how many participants identified as liberal or conservative. 

Political commitment

The experts responsible for the proposal were actively involved in the online feedback and engagement process, with members of the public asking questions, making suggestions, and telling their personal stories.  Approximately 40 percent of the comments comprised the primary experts’ interaction with the public. The initiative was used by the experts to test and evaluate the quality of the proposals emerging from the process. There was limited marketing or engagement from wider lobbying groups and political figures, and no government institution publicly supported the initiative.

Public confidence

Eric Toder and Alan Viard are highly respected experts in their field, who enjoy the confidence of different sides of the political debate.[9] In representing these viewpoints and agreeing on the information presented in the process, they were able to lend it their authority. Public participation in the process increased over time, suggesting strong engagement. There were also very positive reports in the press on the approach and outcome.[8][9] A further strength of the initiative lay in presenting often complex information in an accessible way that allowed for meaningful and informed input from the public. 

According to the organisers, the experts involved in the project said that they were surprised to discover that the quality of discussion, scrutiny and suggestions of lay members of the public was higher than they had received from other experts. Furthermore they claimed as a result of the success of this pilot, there was interest in scaling up the initiative and launching it nationwide to encompass thousands of Americans. 

Clarity of objectives

The purposes of the initiative were clearly stated, and it provided a clear description of the policy challenge, the proposed solution, and expected outcomes. In addition, all materials presented were vetted by several groups of 10th graders (American high school students) for ease of understanding, clarity, and flow, prior to posting on TheChisel. TheChisel, with the approval of both experts, revised the presentation of the proposal based on how easy the students found it to use and understand.

Strength of evidence

One of the strengths of the initiative was to build a strong, bipartisan, evidence-based proposal on which to ground decisions. This involved a process of collecting a wide range of research and evidence and mediating between the different groups to identify what information was well founded, acceptable to both sides, and salient to the issue. This resulted in substantive revisions in the proposal and shifts in opinion among the experts. 


According to an interviewee involved in delivering the project, key officials from the US Commerce Department and Treasury Department have commented that the proposed solution to corporate income tax reform developed through this initiative was not only feasible but was a preferable solution to the one enacted in 2017. They have since expressed a desire to apply some elements of the proposal in future legislation. Feedback from experts and political actors suggests that the case illustrates the value of public engagement and of drawing on the collective intelligence of the public to develop optimal solutions to complex policy challenges. The initiative made effective use of technology to coordinate expertise and invite large-scale public engagement in a way that was more cost-effective and efficient than traditional forms of civic engagement. 

A key condition for the success of this initiative was the willingness of key stakeholders to engage and act in good faith. Therefore, the capacity to replicate the success of this initiative depends on ensuring that multiple stakeholder groups are willing to work together to forge a consensus-driven decision or plan. On this issue, highly respected experts from liberal and conservative backgrounds were willing to commit their time to the development of a bipartisan proposal. The challenge for any future application would rest on the attitude of stakeholders and the receptiveness and cooperation of decision-making institutions. 

An individual involved in delivering the initiative commented that the scope for projects such as these to influence decision-making at the federal level would depend on navigating lobbying influence and powers at the institutional level. It was suggested that, at least for the time being, the project was best suited to decisions at a local or state level.


In addition to working with two of the nation’s most highly-regarded tax experts, TheChisel is an experienced team comprised of senior executives, project managers, and analysts. Proposals were vetted and required a majority of support amongst different groups. In addition, TheChisel’s advisory board also provided feedback on the process and outcome.


The initiative was a pilot that did not lead to implementation therefore it cannot be evaluated on measurements to ensure effective implementation.


The initiative was a pilot that did not lead to implementation therefore it cannot be evaluated on the alignment of values of those responsible for implementing the policy.


[1] The Right Way to Cut Corporate Taxes, The Editorial Board, 12th November 2017, The New York Times, Available at:

[2] U.S Corporate Tax Reform, 3 November 2017, Council on Foreign Relations, Available at:

[3] Reform Corporate Income Tax, 15 March 2018, TheChisel, Available at:

[4] Republicans Sought to Undercut an Unfavorable Analysis of the Tax Plan, Jim Tankersley, 4 December 2017, The New York Times, Available at:

[5] An Overview of Recent Tax Reform Proposals, Mark P. Keightley, 28 February 2017, Congressional Research Service, Available at:

[6] A New Proposal for Corporate Tax Reform: Joint Event Between American Enterprise Institute and the Urban-Brookings Tax Policy Center, Tax Policy Center, Available at:

[7]  Available at:  

[8] Why Lower Corporate Tax Rates? 18 January 2018, Reconsider Media, Available at:

[9] A Bipartisan Plan to Cut Corporate Taxes, William A. Galston, 31 October 2017, Wall Street Journal, Available at:


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