Here is what I love about this…currently – corporations have a marginal tax rate of 35% but really pay all over the board. Some get huge subsidies from American taxpayers in the form of getting tax refunds….many pay 0% and still others pay anything from 5% to 20%. It isn’t a good system and really rewards those with access to Congress. So – Obama is proposing cutting the corporate tax rates in return for the removal of several corporate tax loopholes that Corporations DO NOT WANT TO LOSE.
For example – currently….many corporations game the tax code by posting profits to their foreign subsidiaries and posting losses here in the U.S. So hundreds of billions in profits get stuck overseas and these corporations do nothing with it, because if they were to bring those profits back home…they would have to pay taxes on them. So – to fix that….corporations would be charged with a small foreign profits tax. This will dissuade them from gaming the system…and will mean that if they have operations in China – they have to pay taxes on those profits. It will also reward those who keep jobs here in America.
Of course – Republicans LOVE what they call “corporate tax reform” until it means that corporations actually have to pay taxes. So…those gaming the system….they won’t want to see changes since they currently pay ZERO. Watch to see who only timidly embraces this proposal….and tries to block the foreign revenues provision. There are tens of millions being spent on corporate lobbying to move forward a corporate tax holiday which is a huge giveaway to corporations for having dodged the tax code in the first place. Obama’s proposal fixes that from happening in the future….unless Congress tries to repass the same loopholes (which they are prone to do).
President Barack Obama will call for cutting the top 35 percent corporate tax rate as early as this month, according to two sources close to the administration.
The president is likely to propose a rate closer to an average of that seen in peer nations, the sources said.
Obama outlined tax measures – including closing tax loopholes for companies that move facilities and jobs overseas – in his State of the Union speech in January, and will lay out principles for revamping corporate taxes by the end of February, a senior administration official said.
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