Obama’s Corporate Tax Plan Would Cut Rates, Eliminate Loopholes
EmailArguing that the current corporate tax system hinders economic growth and job creation, President Obama today called for slashing the corporate tax rate from 35 to 28 percent by eliminating loopholes and subsidies.
“Our current corporate tax system is outdated, unfair, and inefficient. 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 is unnecessarily complicated and forces America’s small businesses to spend countless hours and dollars filing their taxes. It’s not right, and it needs to change,” the president said in a written statement.
Obama’s proposed overhaul, announced by the Treasury Department, instead aims to simplify the corporate tax code and broaden the base. To pay for the cuts, the administration would do away with subsidies and loopholes that save companies billions of dollars each year, including those for oil and gas companies.
To encourage domestic investment, the White House plan would reduce the tax rate for manufacturers that create new products and produce goods in the U.S. to 25 percent and establish a minimum tax on foreign earnings.
“We want to restore a system in which American businesses succeed or fail based on the products they make and the services they provide, not on the creativity of their tax engineers or the lobbyists they hire,” Treasury Secretary Timothy Geithner told reporters today.
The administration’s framework is “fully paid for, and it won’t add a dime to the deficit,” Obama said.
While the election-year proposal puts the president at odds with Republicans vying for his position, who would like to see lower corporate tax rates, both sides of the aisle on Capitol Hill have shown previous support for reducing corporate tax rates while eliminating special-interest loopholes.
Geithner said today that he has already been in contact with Senate Finance Committee Chair Max Baucus, D-Mont., and Rep. Dave Camp, R-Mich., chairman of the Ways and Means Committee. “We plan to meet, hopefully next week, to begin the process of building consensus, deciding how to move forward,” Geithner said.
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What will be the unintended consequences of the minimum tax on international profits? My company has international locations that do not supply the US market and pay taxes in those countries. Are they going to have to pay this new tax. Doesn’t seem fair.
Posted by: They all stink again | February 22, 2012, 6:26 pm 6:26 pm
I just read that there’s talk about an across the board tripling of the effective capital gains rate from 15% to nearly 45% starting in January next year (Wall Street Journal). Will that ever chase the small investor away! How freaking shortsighted can these guys get?
Posted by: newcountryman | February 22, 2012, 7:15 pm 7:15 pm
I just read that there’s talk about an across the board tripling of the effective capital gains rate from 15% to nearly 45% starting in January next year (Wall Street Journal). Will that ever chase the small investor away! How freaking shortsighted can these guys get?
Posted by: newcountryman | February 22, 2012, 7:15 pm 7:15 pm
President Obama has always framed the capital gains tax increase only on those earnings that are extraordinary, not the small investor. Small investors are not making $250,000 a year in profits from their investments. Nor are they making a million dollars a year from their investments.
Posted by: Betty | February 22, 2012, 7:57 pm 7:57 pm
How freaking shortsighted can these guys get? Their not being shortsighted they are looking after their interest. The team in power will drop breaks favored by the other team and then give those breaks to their special interest. Instead of a simple flat tax on everything and everybody they’ll make pass reform that can only be understood by ‘really smart people’. Really smart people who have us 15 trillion in debt.
Posted by: david | February 22, 2012, 8:24 pm 8:24 pm
Betty (7:57 PM); I did not read that caveat. Question; How do you define “extraordinary”? Obama lies. $250K becomes $200K. Now honestly, I’ve never earned that much. But I’ve come close. My grandmother worked on Capital Hill after the war. She had some stories.
Posted by: newcountryman | February 22, 2012, 9:13 pm 9:13 pm
As a waitress on Capital Hill, my grandmother counted quarters as tips to to pay the Catholic school for me to go there (I think it was $5.00/month). I saw her do it. I always wondered what happened to those nuns.
Posted by: newcountryman | February 22, 2012, 9:18 pm 9:18 pm
$250K becomes $200K. Now honestly, I’ve never earned that much. But I’ve come close.
Posted by: newcountryman | February 22, 2012, 9:13 pm 9:13 pm
It’s important to keep on topic. If you were earning $250K or $200K or $1M or more in capital gains profits on your investments, you were not a small investor.
Posted by: Betty | February 22, 2012, 9:35 pm 9:35 pm
Posted by: Betty | February 22, 2012, 9:35 pm 9:35 pm
There’s a good reason why you’re not a wealthy. Your understanding of finance and human behavior is sorely lacking. Punishing ANY investors, small or large, is idiotic and counterproductive. History shows us they’ll invest LESS, which means LESS CAPITAL FORMATION and LESS REVENUE to the government.
Posted by: sarah | February 22, 2012, 10:08 pm 10:08 pm
Posted by: sarah | February 22, 2012, 10:08 pm 10:08 pm
Will that ever chase the small investor away!
Posted by: newcountryman | February 22, 2012, 7:15 pm 7:15 pm
If you were earning $250K or $200K or $1M or more in capital gains profits on your investments, you were not a small investor.
People earning $250K or $200k or $M or more in capital gains PROFITS in a year can afford to pay more that 15% in tax. It’s not ‘punishment’, it’s a tax – same as a waitress has to pay taxes or a janitor.
In the Eisenhower era of a great America, these people paid up to 90% in taxes and they didn’t whine about it. They were happy to live in the greatest country in the world and be rich. Now you’re saying they’re going to whine and cower and exhibit the greatest GREED ever know by mankind – or hide their money offshore, or move their companies bases to Switzerland? Great patriotic Americans attitude isn’t it? No wonder the country is in such pitiful shape with attitudes like yours.
As we’ve actually found out, many of those super rich think its’ a GOOD idea to tax them more. Its dumb ideologues like you that give them a bad name.
Posted by: Betty | February 22, 2012, 10:25 pm 10:25 pm
The Washington Post revealed on Jan. 24 Romney’s $21.7 million income in 2010 and $20.9 million income in 2011 – most of his money was made from capital gains in various investments and stock dividends
Romney’s federal tax rate for 2011 ended up at about 13.9 percent.
And who says the tax system isn’t fair?
Posted by: Mike | February 22, 2012, 10:36 pm 10:36 pm
Posted by: Betty | February 22, 2012, 10:25 pm 10:25 pm
Yeah, well, one critically important lesson for attaining financial success is to not take financial advice from broke people. If you ever hope to achieve any level of financial success you should talk a lot less and listen a lot more to people who have actually achieved it. With few exceptions, the wealthy are wealthy because they’re not stupid. There are plenty of legal ways to restructure stock and mutual fund portfolios (and compensation packages) to deny the government the revenue it’s after and there’s nothing you can do about it. The reason the country is in such pitiful shape is because of people like you who find ways to steal from GDP instead of contributing to it.
Posted by: sarah | February 22, 2012, 10:44 pm 10:44 pm
Posted by: Mike | February 22, 2012, 10:36 pm 10:36 pm
How much tax did Romney pay on his original earnings? What was your effective tax rate for 2011? Zero? How many millions did you contribute to charity?
Posted by: sarah | February 22, 2012, 10:52 pm 10:52 pm
How much tax did Romney pay on his original earnings? What was your effective tax rate for 2011? Zero? How many millions did you contribute to charity?
Posted by: sarah | February 22, 2012, 10:52 pm 10:52 pm
The principal Romney invested is NOT taxed in capital gains. Only the PROFITS on those investments.
Romney’s $21.7 million income in 2010 and $20.9 million income in 2011 – most of his money was made from capital gains in various investments and stock dividends
Romney’s federal tax rate for 2011 ended up at about 13.9 percent.
And who says the tax system isn’t fair?
Posted by: Mike | February 22, 2012, 11:02 pm 11:02 pm
The reason the country is in such pitiful shape is because of people like you who find ways to steal from GDP instead of contributing to it.
Posted by: sarah | February 22, 2012, 10:44 pm 10:44 pm
You don’t have a clue what you’re talking about. Is this what you do – make up stuff and pretend its real.? No wonder there is so little of value to be found in your posts.
Posted by: Betty | February 22, 2012, 11:05 pm 11:05 pm
Posted by: Betty | February 22, 2012, 11:05 pm 11:05 pm
At the end of the day I’ll still be content and well off and you’ll still be bitter and broke.
Posted by: sarah | February 22, 2012, 11:10 pm 11:10 pm
At the end of the day I’ll still be content and well off and you’ll still be bitter and broke.
Posted by: sarah | February 22, 2012, 11:10 pm 11:10 pm
Again, you don’t have a clue what you’re talking about. Is this what you do – make up stuff and pretend its real? It’s no wonder there is so little of value in your posts. Plus, you’ve already been caught lying many times – so much for your pronouncements – nobody cares what you say.
Posted by: Betty | February 22, 2012, 11:19 pm 11:19 pm
At the end of the day I’ll still be content and well off and you’ll still be bitter and broke.
Posted by: sarah | February 22, 2012, 11:10 pm 11:10 pm
Again you reveal your boastful ignorance, and how little you know.
Posted by: Betty | February 22, 2012, 11:23 pm 11:23 pm
“I think it’s the most blatantly dishonest performance by a presidential candidate I’ve ever seen,” Newt Gingrich on Mitt Romney, January 27, 2012.
Even the Republicans can’t stand other Republicans.
Posted by: Betty | February 22, 2012, 11:30 pm 11:30 pm
Note to Obama, you’ve been President for 3+ years and NOW you’re talking about an unfair corp tax rate? Hello! Is it possible that he’s just campaigning and playing politics with this……nah. He acts like he’s not President yet….no accountablity and full of new ideas now in the final hour. Sad.
Posted by: Ted | February 23, 2012, 1:17 am 1:17 am
Posted by: Ted | February 23, 2012, 1:17 am 1:17 am
Pretty sure you don’t make major changes to tax structures in the middle of a Great Recession. Now that the economy has been improving its’ a better time to address it.
Posted by: Larry | February 23, 2012, 2:40 am 2:40 am
This is for campaigning only, Obama knows it will never pass. The best thing to do would be to overhaul the entire tax structure and simplify it not to keep tweaking it.
Posted by: Todd | February 23, 2012, 4:28 am 4:28 am
Oh my Betty. Sarah’s got it right.
Posted by: Douglas | February 23, 2012, 5:14 am 5:14 am
Simpson and Bowles said that the tax rate should be 26% which is still a bit high 24% would be good. I wonder why Obama went high with his 28% rate.
Simpson and Bowles also said we needed to cut the federal work force by 10% which after NoBo’s increases should be 11 to 12%. They also said a reduction in entitlements was necessary.
Does Barry’s Tax Plan deal with these issues?
Posted by: Noz | February 23, 2012, 7:54 am 7:54 am
POSTED BY: BETTY | FEBRUARY 22, 2012, 10:25 PM 10:25 PM, you forget that the rest of us paid 50%, is that what you want??
Posted by: Lizzie | February 23, 2012, 9:06 am 9:06 am
Mike, is that why Buffet makes sure he gets his in capital gains and not as salary.
Posted by: Lizzie | February 23, 2012, 9:08 am 9:08 am
Bankruptcy judge approves SOLYNDRA bonuses…
Obama smiling this morning after blowing $535,000 of taxpayer money on his friends adn they still get taxpayer bonuses
OBAMA_____VS_____AMERICA
Posted by: Yep I said that | February 23, 2012, 10:13 am 10:13 am
“We want to restore a system in which American businesses succeed or fail based on the products they make and the services they provide, not on the creativity of their tax engineers or the lobbyists they hire,” Treasury Secretary Timothy Geithner told reporters today.
Then why is Obama still giving tax breaks to “green” companies in this plan? Because HE wants to pick the winners and losers once again. I WISH we had good journalists.
Posted by: wheresmymoney | February 23, 2012, 10:20 am 10:20 am