Obama Tax Plan: Eliminate Loopholes, Cut Corporate Taxes

[Frodo]

Obama’s tax plan: Close loopholes, cut corporate rate to 28 percent

BY JIM KUHNHENN
The Associated Press

First published Feb 22 2012 09:48AM
Updated 8 minutes ago

Washington • President Barack Obama rolled out a corporate tax overhaul plan Wednesday that lowers rates but also eliminates loopholes and subsidies cherished by the business world. A long-shot for action in an election year, the plan nevertheless stamps Obama’s imprint on one of the most high-profile issues of the presidential campaign.

The president’s plan to lower the corporate tax rate to 28 percent came on the same day Republican presidential contender Mitt Romney called for a 20 percent across-the-board cut in personal income tax rates, underscoring the potency of taxes as a political issue, especially during a modest economic recovery.

Obama has not laid out a plan for overhauling personal income taxes. But he has called for Bush-era tax cuts to end on individuals making more than $200,000, thus increasing their taxes, and for a 30 percent minimum tax on taxpayers who make $1 million or more.

[Yelnoc]

Did I ever mention that my AP US History teacher called Obama a socialist in class a few weeks ago?  This was the day after we determined Communism and Fascism are the same thing...

[opebo]

Did I ever mention that my AP US History teacher called Obama a socialist in class a few weeks ago?  This was the day after we determined Communism and Fascism are the same thing...

So basically your teachers are FOX news madmen?

It is egregious but not surprising to see Obama proposing to lower rates on the parasites.

[memphis]

Did I ever mention that my AP US History teacher called Obama a socialist in class a few weeks ago?  This was the day after we determined Communism and Fascism are the same thing...

I'd report a teacher like that. They're not allowed to do that.

[Ban my account ffs!]

Did I ever mention that my AP US History teacher called Obama a socialist in class a few weeks ago?  This was the day after we determined Communism and Fascism are the same thing...

I'd report a teacher like that. They're not allowed to do that.

Teachers should be neutral in their judgment of students' opinions on touchy subjects.  But that doesn't mean the teacher can't make their opinion known, so long as they are careful to take an "open for debate and discussion" approach to it and not an "I'm the teacher, therefore I am right and your opinion will get you a bad grade" approach.

I had a teacher in high school who was a devout Catholic... and on 9/11 when Bush said a prayer on national television, she muted the TV so the students couldn't hear it.

I had an art class that period with a much more liberal teacher who wouldn't dare mute something like that.

Students shouldn't be afraid that their views and opinions will get them a failing grade... but teachers shouldn't fear that either.

[Ban my account ffs!]

As for the corporate tax rate... this is probably good purely from a competitive standpoint.  We need a much fairer corporate tax structure.  Stop encouraging and discouraging certain behaviors with tax policy.  Do that with regulations if you have to, but make tax policy easy to understand and predictable.

It's important to have a competitive corporate tax due to international competition.  Since we're still a world of nations without a single world government deciding tax policy, it will naturally be a race to the bottom in this age of super cheap shipping/transport costs.

We need to make up for it by increasing the income and capital gains tax rates on the wealthy.  We should also make the income tax structure much steeper.  When middle class and poor Americans have more money in their pocket.. they will spend most of it, and save and invest the rest.  When the rich have all the wealth, they tend to hoard it overseas and do not invest it in America.  That needs to change... because we have set up an economy where setting up business in a foreign country is much much much easier than moving to a foreign country to find work.  Until we have a truly nationless/borderless world, we need to be creative in finding ways to keep wealth within our borders.

[Marokai Backbeat]

Cutting corporate taxes is such a socialist thing to do.

[anvi]

This story is receiving surprisingly little comment from forumites.  Why? 

[muon2]

I heard a speech last night from a top House leader to a GOP crowd and he called for a cut of corporate taxes and closing loopholes to create a simpler tax structure. On the face of it it sounds like the House and WH should be on the same page. There was a distinction however. The speaker also noted that over 90% of businesses pay income tax as individuals due to their smaller size. From that I conclude that he would see Obama's plan as a shift of tax burden from large corporations to small businesses who would be hit by raising rates on high income individuals.

[anvi]

Well, why couldn't Obama's first self-initiated plan (he was working on a similar plan with Boehner in last summer's debt ceiling talks before they collapsed) be taken as a negotiating position that could be engaged by the House?  If the basic idea is to lower corporate rates in exchange for closing loopholes, then why not work over the details, debate the issues that the speaker that you heard the other night raised, debate the minimum tax on foreign earnings, and so on, and see if they could come up with a compromise without the debt ceiling problem hanging around everyone's necks and without the TEA Party caucus jerking everyone's chain?  In the spirit of "only Nixon could go to China," maybe this is a good opportunity to seize.

I certainly think the small business taxation elements stand a chance of being equitably hashed out.  I don't necessarily see the tax reform system being contemplated as a shifting of the tax burden from large corporations, especially since, if one actually does close the loopholes, most big corporations will probably, at a 28% rate, be paying more revenue than they are now, but at least the revenue will be generated from growth that would be garnered from the businesses being able to invest to the market instead of around the tax code.  The problem I see with most of the tax plans being put forth by the GOP candidates for the nomination so far (Paul being the exception, although, for me, too radical of an exception) is that, in lowering rates even further, down to 20% or 15% or whatever, without closing loopholes, they don't raise enough revenue to finance their proposed budgetary priorities even after the spending cuts they envision would be implemented.  So why not negotiate over this plan, work out the kinks and see if support could be garnered for a compromise?  

[muon2]

Well, why couldn't Obama's first self-initiated plan (he was working on a similar plan with Boehner in last summer's debt ceiling talks before they collapsed) be taken as a negotiating position that could be engaged by the House?  If the basic idea is to lower corporate rates in exchange for closing loopholes, then why not work over the details, debate the issues that the speaker that you heard the other night raised, debate the minimum tax on foreign earnings, and so on, and see if they could come up with a compromise without the debt ceiling problem hanging around everyone's necks and without the TEA Party caucus jerking everyone's chain?  In the spirit of "only Nixon could go to China," maybe this is a good opportunity to seize.

I certainly think the small business taxation elements stand a chance of being equitably hashed out.  I don't necessarily see the tax reform system being contemplated as a shifting of the tax burden from large corporations, especially since, if one actually does close the loopholes, most big corporations will probably, at a 28% rate, be paying more revenue than they are now, but at least the revenue will be generated from growth that would be garnered from the businesses being able to invest to the market instead of around the tax code.  The problem I see with most of the tax plans being put forth by the GOP candidates for the nomination so far (Paul being the exception, although, for me, too radical of an exception) is that, in lowering rates even further, down to 20% or 15% or whatever, without closing loopholes, they don't raise enough revenue to finance their proposed budgetary priorities even after the spending cuts they envision would be implemented.  So why not negotiate over this plan, work out the kinks and see if support could be garnered for a compromise?  

I think there is room for compromise, but the "all millionaires pay a minimum of 30%" type of tax scale will cause problems for a host of small businesses who pay taxes as individuals, and so also with the GOP. The president would have to move to a more nuanced position on upper incomes to finesse small business taxation.

[Torie]

I heard a speech last night from a top House leader to a GOP crowd and he called for a cut of corporate taxes and closing loopholes to create a simpler tax structure. On the face of it it sounds like the House and WH should be on the same page. There was a distinction however. The speaker also noted that over 90% of businesses pay income tax as individuals due to their smaller size. From that I conclude that he would see Obama's plan as a shift of tax burden from large corporations to small businesses who would be hit by raising rates on high income individuals.

It's the C corp versus S corp thing, and the C corps have the double taxation issue, since dividends are taxed again. One in my view cannot analyze C corps and S corps in the same way, when it comes to tax policy. And C corp taxes have a regressive aspect, since some of that tax is passed on in the form of higher prices, with how much depending on the elasticity of demand for capital.

[muon2]

I heard a speech last night from a top House leader to a GOP crowd and he called for a cut of corporate taxes and closing loopholes to create a simpler tax structure. On the face of it it sounds like the House and WH should be on the same page. There was a distinction however. The speaker also noted that over 90% of businesses pay income tax as individuals due to their smaller size. From that I conclude that he would see Obama's plan as a shift of tax burden from large corporations to small businesses who would be hit by raising rates on high income individuals.

It's the C corp versus S corp thing, and the C corps have the double taxation issue, since dividends are taxed again. One in my view cannot analyze C corps and S corps in the same way, when it comes to tax policy. And C corp taxes have a regressive aspect, since some of that tax is passed on in the form of higher prices, with how much depending on the elasticity of demand for capital.

But as a political matter, one must deal with both forms of corporations. Otherwise it seems to me that both sides can rest upon talking points despite having a lot in common in their speeches.

[Torie]

I heard a speech last night from a top House leader to a GOP crowd and he called for a cut of corporate taxes and closing loopholes to create a simpler tax structure. On the face of it it sounds like the House and WH should be on the same page. There was a distinction however. The speaker also noted that over 90% of businesses pay income tax as individuals due to their smaller size. From that I conclude that he would see Obama's plan as a shift of tax burden from large corporations to small businesses who would be hit by raising rates on high income individuals.

It's the C corp versus S corp thing, and the C corps have the double taxation issue, since dividends are taxed again. One in my view cannot analyze C corps and S corps in the same way, when it comes to tax policy. And C corp taxes have a regressive aspect, since some of that tax is passed on in the form of higher prices, with how much depending on the elasticity of demand for capital.

But as a political matter, one must deal with both forms of corporations. Otherwise it seems to me that both sides can rest upon talking points despite having a lot in common in their speeches.

Sure, they both need to be dealt with, but to treat them the same makes very little sense to me. In the end, it is individuals who pay taxes one way or the other - not entities, where in some form or other the taxes are passed through. And by definition, to cut taxes on S corps means you will be cutting the top tax rate for individual, all individuals, by definition, unless you want to create a tax loophole, where making your living through an S corp gives you a lower rate than making your living under your own social security number.

[opebo]

This story is receiving surprisingly little comment from forumites.  Why? 

Too poor to care about corporate taxes.