In the heated debate about corporate taxes, many argue that the 35 percent maximum federal rate, one of the highest among developed countries, must be cut for U.S. companies to maintain their competitiveness.

Others disagree, saying many big companies have utilized tax loopholes to shirk much of their tax obligation. They note that corporate taxes have slid to approximately 7 percent of federal spending from 13 percent in the 1970s.

You can count Nobel laureate economist Joseph Stiglitz of Columbia University in the latter camp.

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"The idea that lowering the corporate tax rate will lead to more investment is fundamentally wrong," he tells The New York Times.

Perhaps the crux of the problem is that corporations want lower rates, but don't want to give up their own tax benefits. "Businesses all want to get rid of the other guy's tax deductions — and reduce rates," Sen. Carl Levin, D-Mich., tells The Times.

So what's the solution?

"The United States should either reach agreement with its trading partners on a common way to allocate profits of multinational corporations or should scrap the corporate tax and directly tax shareholders instead," Eric Toder, a fellow at the Urban Institute, and Alan Viard, a resident scholar at the American Enterprise Institute, write in an article for MarketWatch.

Under the second option, "the tax system would no longer discourage domestic investment, reward U.S. companies for shifting income elsewhere or favor foreign over U.S.-resident companies," they say.

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