Welcome to DU!
The truly grassroots left-of-center political community where regular people, not algorithms, drive the discussions and set the standards.
Join the community:
Create a free account
Support DU (and get rid of ads!):
Become a Star Member
Latest Breaking News
General Discussion
The DU Lounge
All Forums
Issue Forums
Culture Forums
Alliance Forums
Region Forums
Support Forums
Help & Search
5 Key Facts About The Obama Administration’s Corporate Tax Overhaul
5 Key Facts About The Obama Administration’s Corporate Tax Overhaul
By Pat Garofalo
The Obama administration today is unveiling an overhaul of the corporate tax code, proposing to lower the top corporate income tax rate while eliminating a host of deductions and loopholes. The plan will be formally unveiled later today, but here are some of the important facts released already:
The U.S. already has the second lowest effective corporate tax rate in the world, and is raising historically low amounts of revenue from the corporate income tax. In fact, corporate tax revenue is at a 40 year low, according to the Congressional Budget Office, even though corporate profits have rebounded to their pre-recession heights. And the U.S. effective corporate tax rate is low compared to other developed economies, while U.S. corporations are taxed less than their foreign rivals, as these charts show:
<...>
However, despite these numbers, the plan does not aim for an increase in revenue, above that which would allow for the extension of some credits to be paid for. “Everyone agrees on the basic principle of lowering rates in exchange for eliminating loopholes,” said Dean Baker, co-director of the Center for Economic and Policy Research. “However, I think it is important that the target be some increase in tax revenue.” Otherwise, the burden of deficit reduction will fall upon middle-class and low-income Americans and the services upon which they depend.
http://thinkprogress.org/economy/2012/02/22/429997/5-facts-corporate-tax-obama/
By Pat Garofalo
The Obama administration today is unveiling an overhaul of the corporate tax code, proposing to lower the top corporate income tax rate while eliminating a host of deductions and loopholes. The plan will be formally unveiled later today, but here are some of the important facts released already:
– The administration is proposing a top corporate income tax rate of 28 percent, lowered from its current 35 percent.
– The top tax rate for domestic manufacturers would be 25 percent.
– The plan would implement a minimum tax on overseas profits, as President Obama proposed in his most recent State of the Union address. The minimum tax would limit the ability of corporations to exploit low-tax havens like the Cayman Islands. The U.S. currently loses more to corporate profit shifting than it spends on several federal agencies.
– The plan would pay for the rate reduction by eliminating credits, loopholes, and deductions, including those for the oil and gas industries. Obama’s budget already proposed eliminating 12 tax breaks to oil, gas, and coal companies, saving $41 billion over 10 years.
– The plan would raise $200-$300 billion, depending on which baseline is used, as it would pay for the extension of a host of tax credits — such as the R&D tax credit — that are usually extended without pay-fors. As the Washington Post’s Ezra Klein explained, “their definition of revenue neutral is closer to what the corporate tax code actually says, but it’s about $200 billion above the Joint Tax Committee’s baseline.”
– The top tax rate for domestic manufacturers would be 25 percent.
– The plan would implement a minimum tax on overseas profits, as President Obama proposed in his most recent State of the Union address. The minimum tax would limit the ability of corporations to exploit low-tax havens like the Cayman Islands. The U.S. currently loses more to corporate profit shifting than it spends on several federal agencies.
– The plan would pay for the rate reduction by eliminating credits, loopholes, and deductions, including those for the oil and gas industries. Obama’s budget already proposed eliminating 12 tax breaks to oil, gas, and coal companies, saving $41 billion over 10 years.
– The plan would raise $200-$300 billion, depending on which baseline is used, as it would pay for the extension of a host of tax credits — such as the R&D tax credit — that are usually extended without pay-fors. As the Washington Post’s Ezra Klein explained, “their definition of revenue neutral is closer to what the corporate tax code actually says, but it’s about $200 billion above the Joint Tax Committee’s baseline.”
The U.S. already has the second lowest effective corporate tax rate in the world, and is raising historically low amounts of revenue from the corporate income tax. In fact, corporate tax revenue is at a 40 year low, according to the Congressional Budget Office, even though corporate profits have rebounded to their pre-recession heights. And the U.S. effective corporate tax rate is low compared to other developed economies, while U.S. corporations are taxed less than their foreign rivals, as these charts show:
<...>
However, despite these numbers, the plan does not aim for an increase in revenue, above that which would allow for the extension of some credits to be paid for. “Everyone agrees on the basic principle of lowering rates in exchange for eliminating loopholes,” said Dean Baker, co-director of the Center for Economic and Policy Research. “However, I think it is important that the target be some increase in tax revenue.” Otherwise, the burden of deficit reduction will fall upon middle-class and low-income Americans and the services upon which they depend.
http://thinkprogress.org/economy/2012/02/22/429997/5-facts-corporate-tax-obama/
I agree with Dean Baker, an increase in revenue has to be the goal.
14 replies
= new reply since forum marked as read
= new reply since forum marked as read
of a corrupt and venal government unwilling to impose an equitable tax burden on those most able to pay sufficient to cover its operating expenses, service its debt, and meet its other obligations. 
"Just what we need, more Trickle Down."
...there are corporations paying zero income tax, enforcing 28 percent isn't "trickle down."
30 Major Corporations Paid No Income Taxes In The Last Three Years, While Making $160 Billion
http://thinkprogress.org/economy/2011/11/03/360185/30-corporations-no-taxes/
I mean, only about three industries are paying above 28 percent, and most are paying less than 20 percent.
