Five Ways to Spin Obama Tax Plan
The Obama administration unveiled a plan Wednesday to cut the top corporate tax rate from 35 to 28 percent, along with putting in place specific changes to simplify the tax code and spur growth. The president's plan would lower manufacturers' top effective tax rate to 25 percent, eliminate several loopholes and expand some tax credits, like for research and development. When the full scope of the plan is taken into account, the administration maintains the plan will won't contribute to the deficit.
How effective the proposal might be is a matter of perspective. With an election year upon us and a hyperpartisan congress at work, there a number of different ways to look at the impact of the president's tax deal.
An Earnest Attempt to Broaden the Tax Base
According to the proposal, the U.S.'s top corporate tax rate is 39.2 percent, which is topped only by
However, the plan's real value may come in broadening the tax base. U.S. corporations have long been taking advantage of deductions and tax shelters. According to the Congressional Budget Office, corporations paid an effective rate of 12.1 percent in fiscal year 2011. That's the lowest rate since at least 1972, when the CBO started keeping track of corporate tax rates..
"From my perspective, the biggest advantage for a reduction in corporate tax rate is it reduces the incentives to get involved in all of those tax shelter activities," says
"We are not better off, but lawyers and accountants are better off, because they make money on creating these monsters," he says.
A Push for More Campaign Funds
The president's plan "is not a game changer" by any means, says
Increasing His Centrist Cred
For many voters, the particulars of tax policy are more likely to induce a nap than a spirited debate. But Schier says reducing corporate tax rates can show that the president is appealing to voters beyond his base.
"In terms of the electorate, it's a move closer to the center," he says. "This will position him better to make that spiel that he is not a wild socialist, that he's interested in pro-growth, pro-business policies and so forth."
Another Initiative for the List
In recent months, the
He also has recently sought the authority to consolidate federal agencies in order to create a "leaner government."
The string of initiatives shows that the president is engaged on a number of issues -- even if they don't always come to fruition. For corporate tax reform to become a reality, it would need to be passed by an often-deadlocked
"That's also an issue for Obama -- the do-nothing
A Way To Counter Romney
In a memo to reporters Tuesday, the Obama campaign criticized the Romney tax plan, saying it "promotes corporate profits," and that Romney's largest cut "would reduce corporate taxes by
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Five Ways to Spin Obama Tax Plan | Politics
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