Obama urges corporate tax cut, closing loopholes

[WestVirginiaRebel]

Reuters:

(Reuters) - President Barack Obama made an opening offer in what could be a long negotiation with corporate America on Wednesday, putting forward his first detailed plan to cut the corporate tax rate.

Though it has little chance of becoming law in an election year with Congress paralyzed over fiscal issues, the plan shows Obama's intent to favor domestic over offshore manufacturing and to broaden the tax base by closing corporate tax loopholes.

As lawmakers look to 2013 for the next chance to tackle a comprehensive tax code overhaul, Obama's plan also puts him in approximate alignment with the major Republican presidential challengers, minimizing corporate taxes as a campaign issue.

The president proposed cutting the top corporate rate to 28 percent from 35 percent, addressing a long-standing gripe by U.S. corporations that the rate is too high. It ranks as the second-highest in the developed world, trailing only Japan.

"Our current corporate tax system is outdated, unfair, and inefficient," Obama said in a statement.

"It provides tax breaks for moving jobs and profits overseas and hits companies that choose to stay in America with one of the highest tax rates in the world ... It's not right, and it needs to change," he said.

Republican presidential hopeful Mitt Romney on Wednesday unveiled tax proposals of his own, calling for capping the individual income tax rate at 28 percent, down from 35 percent, and slashing the corporate rate to 25 percent.

Some U.S. companies pay close to the 35 percent top corporate tax rate; some pay nowhere near that, thanks to tax breaks that let them lower their "effective" tax rates.

Of the 30 companies that make up the Dow Jones industrial average, 19 told shareholders that their effective tax rate for their 2011 fiscal years (mostly ending December 31) was lower than Obama's proposed new tax rate.

Of these companies, three - telecom company AT&T, Bank of America, and insurance company Travelers - posted a tax gain. For the other 27 companies in the index, the effective tax rates reported ranged from 2.7 percent for telecom company Verizon Communications to 43.3 percent for oil producer Chevron Corp. These figures are taxes for shareholder accounting but not necessarily what was paid last year because Congress lets companies defer parts of their income tax for future years.

"We are only at the starting point of corporate tax reform, and the road is a long one," said Martin Sullivan, an editor for Tax Analysts and a former U.S. Treasury Department staff member.

REAGAN REFORM

The last major rewrite of the tax code came in 1986 under Republican President Ronald Reagan, who raised corporate taxes.

Since then, the U.S. tax code has become riddled with deductions, exemptions and loopholes, each one defended by interest groups in Washington with hefty lobbying budgets.

Obama's plan was immediately criticized as inadequate by numerous business groups, while others said the plan was a step in the right direction, but short on details.

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Which sounds typical of Team Obama; the details are always in the fine print.

[raygun]

I'd guess that Bastiat would posit that this would be a good move.

 

I recall Gingrich resigning because Clinton got the best of him.

 

Qwexion: Republicans these days have 3 balls, eh?

 

Contemporary Republicans need AT LEAST that many balls in order to stand against the winds of assault blowing against the recently elected TEA party candidates.

 

MOST TEA Party electected candites don't have even a single ball.

 

"This is Gingrich country". - You talk against our man and you're banned.

 

Gingrich QUIT because he knew he was a FAILURE (NOBODY wants to follow a failure)..

[Argyle58]

I'd guess that Bastiat would posit that this would be a good move.

 

I recall Gingrich resigning because Clinton got the best of him.

 

Qwexion: Republicans these days have 3 balls, eh?

 

Contemporary Republicans need AT LEAST that many balls in order to stand against the winds of assault blowing against the recently elected TEA party candidates.

 

MOST TEA Party electected candites don't have even a single ball.

 

"This is Gingrich country". - You talk against our man and you're banned.

 

Gingrich QUIT because he knew he was a FAILURE (NOBODY wants to follow a failure)..

 

Raygun, you are old enough to know better. Newt didn't "quit because Clinton got the best of him". He resigned because of false ethics complaints charged against him by Democrat operatives for the very fact THAT HE CONTINUALLY GOT THE BETTER OF CLINTON!!

 

He was exonerated of 31 of the 32 complaints leveled against him, the one being the miswording of a letter composed by his attorney's office.

 

You should also be aware, since you have shown the intelligence to join this particular adjuct group, that the Tea Party is not a party at all, but a grass roots conservative movement that has as its mission statement a resolution to return the United States of America to the course that was originally set by the Founders.

 

Your contention that virtually all Republicans are somehow testiculary challenged makes me wonder upon which side of the political fence you reside.