Since so many aren’t paying anything now, this should result in an increase:
WASHINGTON — President Obama will ask Congress to scrub the corporate tax code of dozens of loopholes and subsidies to reduce the top rate to 28 percent, down from 35 percent, while giving preferences to manufacturers that would set their maximum effective rate at 25 percent, a senior administration official said on Tuesday.
Mr. Obama also would establish a minimum tax on multinational corporations’ foreign earnings, the official said, to discourage “accounting games to shift profits abroad” or actual relocation of production overseas.
His proposal would close a lot of the present loopholes, which Republicans of course oppose.
Obama cutting Romney off at the knees. This is pure politics on Obama’s part. Good for him.
Unfortunately, this just won’t happen.
No way will the economic elite allow themselves to be taxed equitably.
You will shortly be hearing cries of “European-style socialism”, “destroying jobs”, “raising taxes”, “strangling the economy”, “crippling our ability to compete internationally”, and “putting people out of business” Just watch.
while the basic idea of lowering the overall corporate tax rate but eliminating the loopholes is a good one and works pretty well politically (on paper it’s a tax cut because the overall rate is going down even if practically speaking it would mean that corporations would pay more, and who wants to defend the loopholes?), in the long run business is going to use its muscle to get those loopholes slipped back in and we’ll end up worse than we were before (with a 25% rate and a ton of loopholes instead of a 35% rate with a ton of loopholes).
the strategy only will really work if they somehow change the rules to make it harder to slip in loopholes. maybe the senate can make a rule that any exceptions to the 25% corporate tax rate has be to voted in a separate bill (and not slipped in as a rider or amendment to something else)