Obama To Propose 28% Corporate Tax Rate, Go After Oil And Gas Companies
If you remember, Obama announced as part of his campaign style budget that he was going to push for corporate taxes in line with peer nations, which would have put the rate at about 20%. Well, his love of high taxes didn’t quite allow him to get there
(Washington Post) President Obama on Wednesday plans to propose a major overhaul of the nation’s corporate tax code, an election-year gambit that is likely to draw a contrast over a key policy issue with the Republicans vying to replace him.
Obama will propose lowering the nation’s tax rate to 28 percent. At the same time, however, he will seek to increase the amount of revenues raised overall through corporate taxation by eliminating numerous deductions and loopholes that save companies tens of billions of dollars a year on their tax bills, according to a senior administration official.
Perhaps Obama should talk with his buddy and adviser, Jeffrey Immelt, head of General Electric, about GE paying virtually no taxes in 2010. Now, removing some deductions and loopholes is not necessarily a bad thing: the “Bush tax cuts” actually removed many, one reason why the tax burden shifted to those evil rich people who donate so much to Obama’s campaign chest. That said, if the idea is simply to find a way to make corporations pay more taxes directly to the Central Government, those same corporations will work harder to find ways to avoid paying taxes, regardless of which way their leaders lean politically. The proof is in the details, and whether Obama actually goes further than simply announcing he wants a lower corporate tax rate, and submits some sort of legislation to Congress.
In his proposed rewrite, Obama will target oil and gas companies for tax hikes while promising special breaks for manufacturing companies, according to a senior administration official.
That one sentence shows what this is really all about, going after oil and gas companies while hooking up unions, companies that tend to donate Democrat, and, I’m sure “green” energy will be included. Democrats, including Obama, have long wanted to removed tax breaks for oil and gas, because they’re, well, Evil in Liberal World. Announcing the removal allows Obama to play class warrior, and, if said breaks were actually removed, he could then claim that the gas price rise is a result of oil and gas companies being big meanies, rather than his own absurd energy policies.
“We are going to propose a broad reform that will lower rates, broaden the base and eliminate and wipe out a very substantial fraction, dozens and dozens and dozens of special tax preferences for businesses,” Geithner said in congressional testimony last week. “We’re doing that because we think there’s a compelling economic case for doing that.”
Obama’s plan to raise additional tax revenue through corporate tax reform is notable because officials had previously suggested that they were hoping that corporate tax reform would neither add to, nor subtract from, annual budget deficits.
So, we can see that the idea is simply to create a situation where corporations are paying more tax directly to the Central Government, rather then reducing the rate which would incent companies to spend more of the money they keep, spreading it around to workers and through the economy. Typical.