When one man's 'loophole' is another man's stimulus

[Geee]

Washington Examiner:

President Obama says he wants to cut the corporate income tax rate while closing "loopholes." But - as is often the case on taxes - it's best to heed what he does, not what he says. Obama has supported - often stridently - most of the biggest "loopholes" in the current corporate income tax code. Unless he is willing to end manufacturing tax breaks, low-income housing credits, and ethanol subsidies, his loophole-closing talk from the State of the Union and his speech to the Chamber of Commerce is just more Obama jabberwocky on taxes.

The Tax Foundation analyzed Treasury Department data on "tax expenditures" that benefit corporations - the sort of deductions, credits, or special rates that could be called "corporate tax loopholes" - and concluded that there wasn't much revenue to be gained by closing them. But ending these credits and deductions would still be good policy for reasons Obama articulated to the Chamber: "You've got too many companies ending up making decisions based on what their tax director says instead of what their engineer designs or what their factories produce."

This perverts the free market, allocating resources not where there's demand, but where there's the best tax treatment. Obama is right to criticize the mess, but what will he do about it?

The single largest "loophole," according to Treasury data, involves multinational corporations. These companies can defer taxes on some foreign income by deferring dividend payments.