Wednesday, February 22, 2012
Corporate Tax Reform Plan
February 22, 2012
In the upcoming election the current state of the economy is set to be a huge debate issue. It has already been a grueling race for the republican nomination and the presidential election will be much of the same. President Obama will be judged by the productivity of the country since he has gotten into office. This is one reason why the Obama administration’s corporate tax reform plan is highly anticipated. President Obama would certainly like to have this tax reform plan as evidence that he is steering the United States in the right direction.
“Our tax system should not give companies an incentive to locate production overseas or engage in accounting games to shift profits abroad, eroding the U.S. tax base,” said a senior administration official. This is the aim of the corporate tax reform plan that the Obama administration is unveiling today. The plan will lower the top income tax rate from 35 percent to 28 percent. The plan will also give new tax benefits to companies that manufacture in the U.S. while oil and gas companies will see greater tax and lose large deductions and subsidies. The plan allegedly will raise $250 billion over the next 10 years. This will be the first time in 25 years that the overall corporate tax rate will be lowered and its current 35 percent is among the highest in the world.
One of the major issues being addressed in the bill is American companies staying in America and investing in America. The bill aims to “create more incentives for corporations to invest in the United States.” As it stands now many corporations shy away from investing overseas profits into the U.S. because they will face a 35 percent tax rate. Getting companies and their money back to America has been a major concern and will be a hot issue in the upcoming election.
Another aspect of the bill is to provide “fairness and simplicity.” The current system has many loopholes which President Obama addressed in his State of the Union speech saying, “Those with accountants or lawyers to work the system can end up paying no taxes at all. But all the rest are hit with one of the highest corporate tax rates in the world (35%).” By simplifying the system and lowering the tax the bill should be able to ensure taxes are being paid while encouraging American business.
This does come at a crucial time for President Obama as he faces reelection which is why “administration officials insisted the president is behind the plan and the Treasury Department is merely filling in the details.” This does appear to be an effective plan that has bipartisan support as “many members of both parties have said they favor overhauling the nation’s individual and corporate tax systems.” Currently all candidates seeking the republican nomination have called for a reduction in corporate tax. Mitt Romney wanted to see corporate tax as low as 25 percent and Newt Gingrich who said he would chop the rate by 12.5 percent. Rick Santorum went as far as wanting to exempt “domestic manufacturers from the corporate tax and halve the top rate for other businesses.”
http://www.foxnews.com/politics/2012/02/21/obama-administration-to-unveil-corporate-tax-reform-plan/
http://whitehouse.blogs.cnn.com/2012/02/22/obama-to-offer-corporate-tax-reform-plan/?iref=allsearch
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2 comments:
Nicolas, I think the issue that you presented here is undoubtedly a concern for most Americans and businesses. President Obama entered the White House with a large weight on his shoulders to fix our economy, and while it hasn't totally been repaired, there have been improvements. This Thursday, March 1st, Obama will be in Nashua, NH addressing a crowd on the topic yet again. Over the past six months or so, NH has been inundated with political propaganda from republican candidates and their own plans to repair the economy. If Obama wants to have another term in office, he best gain the support from both parties.
Fantastic post, dude!
I personally find President Obama’s plan to be the most sound when in regard to actually bringing job’s back to this country. Whereas the Republican canadates are all calling for slashing taxes, they offer up no real reason for corporations to move jobs back to the United States. By offering companies tax benefits for investing in making jobs in the US, fixing the tax structure to make sure everyone is paying their fair share, and also lowering the actual tax rate I feel that our country will benefit in the long run.
I do have to disagree with him on taking away gas and oil deductions and subsidies. Currently, the gasoline tax in the United States adds about 50 cents to the average gallon of gas. If those deductions and subsidies are taken away, and I hate this as much as everyone else, you know that oil prices are bound to shoot up even higher.
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