Obama to Co-Opt Republican Corporate Tax Plan

According to sources close to the Obama administration, President Barack Obama will call for cutting the top 35 percent corporate tax rate as early as this month.

The president will likely propose lowering the rate to closer reflect the average of peer nations, the sources said.

Last year Treasury Secretary Timothy Geithner suggested that the U.S move to a rate more comparable to its major trading partners in the high 20-percent range.

In January in his State of the Union address Obama outlined tax measures that included closing tax loopholes for companies that move facilities and jobs overseas.

“We will talk more before the end of the month on what corporate tax reform would look like,” the official said on Friday, confirming that it would include a call for “lower rates.”

While he spent a big part of his January speech to Congress criticizing businesses for moving jobs overseas, Obama said that “companies that choose to stay in America get hit with one of the highest tax rates in the world.”

Only Japan has a steeper corporate tax rate than the United States among industrialized countries, though other countries make up the revenue with a value-added tax which the U.S. does not have.

“I think what he will end up doing is saying, ‘For years folks have been asking for a lower corporate rate, and here it is – what do you think?,’” said Jared Bernstein, a former economic advisor to Vice President Joe Biden.

According to a former official the Treasury Department was set to release plans to revamp corporate taxes last year, but decided not to after business opposition.

Republican Rep. Dave Camp, the chairman of the U.S. House of Representatives’ tax-law writing Ways and Means committee, has set a goal of trimming the top 35 percent corporate rate to 25 percent.

Gene Sperling, director of Obama’s National Economic Council, has told reporters that the president will be laying out “principles” for corporate tax reform close to the budget release.

Obama’s corporate plan will also include a new minimum tax on foreign profits earned in low tax countries.

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9 Comments

  1. While we do have a high corporate tax rate it’s my understanding there are also a vast multitude of loopholes so that many companies pay very little or no federal taxes.

    I’d say, this reduction is a good idea if those loopholes, or at least a large number of them, are closed.

    • either way they’d still end up paying a historical low amount in taxes, so I don’t see what the difference is, it won’t bring a significant amount of jobs back to America, this is just a way for the President to buy some corporate votes and get some corporate cash in an election year, let’s not forget that last week he reversed course and said he will be accepting super PAC money…

      • First, don’t get me wrong, I don’t agree with giving corporations any kind of break but having said that, if you eliminate the loopholes and all of them pay a 25% interest rate they would actually be PAYING taxes. I’ve heard Bill Clinton suggest this before and thought it was worthwhile. As long as there aren’t any corporations sneaking out of their taxes then that’s gotta be an improvement.

        Plus, if those companies that do bring business back to the States then sure give ‘em a break and penalize those that outsource. That’s got to have some impact for bringing some back here.

        As far as the SuperPAC flip goes, I say go for it. The GOP is going to be taking full advantage of them so why can’t Obama? He’s got to be able to compete. Why risk losing an advantage because he didn’t utilize them. Then if he wins he can still be against their use and fight for an amendment to halt that practice.

        Anyways, those are just my opinions on those issues.

      • as far as super PACs go he has a ginormous advantage, he’s the PRESIDENT!! why would he need secret special interest money to win?? wouldn’t him standing strong on his principles and using all the avenues available to the president while pointing out to the American people that the repubs are swimming in corporate cash be an advantage?? to me the fact that he feels he needs that money to win just shows that he knows he can’r run on his record and he must believe that the American people are stupid and susceptible to misleading political ads ..

      • “…he knows he can’r run on his record and he must believe that the American people are stupid and susceptible to misleading political ads ..”

        Or he feels the more money he has in the campaign warchest, the more he has available to communicate the realities and combat the massive misinformation that comes out of the right-wing. Something that has increased steadily since the swiftboat-John Kerry thing.

        There is a a TON of records to be set straight out there after all the ridiculous crap we’ve seen come out of the GOP presidential contest. I’d rather see him be prepared to defend himself. Plus, who says he will hide funding from the SuperPACs? And just one technicality is that the candidate cannot have any operational contact with the PAC’s. They separate entities.

      • again, he is the president he already has the biggest platform in the country to speak to the American people..if he was concerned about superPACs and their negative influence he would introduce legislation for transparency and regulation, and you don’t seriously believe that the candidates have no operational contact with the PACS, do you?

      • “…you don’t seriously believe that the candidates have no operational contact with the PACS, do you?”

        Well, belief of not, if they are caught having operational links they are in violation of campaign finance laws.
        It doesn’t sound like we’re going to find agreement on the SuperPAC thing. I just feel if they are going to be used against him, he has every right to use them to fight off the attacks he’s had leveled against him.

      • well the administration themselves said only the president, vice president and first lady will not have contact with the superPACs, the rest of the administration will be attending superPAC fund raising events and the administration is directing supporters to give money to the PACs so they are obviously using whatever loopholes they can to get around campaign laws..and the idea of “if you can’t beat them join them” is hardly inspiring…

  2. DON’T worry not only manufacturing jobs but also jobs like in service sector jobs , management level jobs , financial sector , banking , insurance , legal, pharma l etc etc thousand of them r going to be outsourced overseas , (watch that YouTube link too).

    The dip in unemployment rate is temporarily and its cooked for election 2012 ,
    after election it will be risen considerably in tow digits (and don t forget about the quality of jobs).

    http://online.wsj.com/article/BT-CO-20111221-707599.html

    This current Call Centre bill And American jobs Act will be also not passed , same as previous outsourcing bill which was dead.Its an Election gimmick , with nexus of corporate s (wall street ) and government to fool people , and they r damn sure that this will too not pass very damn sure , infact Morgan Stanley and jp morgan chase (these both got large amount Bailout from fed (tax money)) is going to cut more jobs in US around most of them and they will will transferred to India , they want to transfer about 92 % more jobs outside , A mortgage company OCWEN FINANCIAL which has 90 % of jobs outsourced overseas ( India and some to Uruguay ) r buying more mortgage companies like LITTON from Goldman sachs and HomeEq servicing from Braclays and together with Altisource etc and transfer there jobs to overseas too ( mostly all of them ) same with IBM and other companies. so most of american companies will be employing overseas people in future ( might be 95 % of workforce). jobs of authors , contents writers , editors , copy writers etc etc will also be going to be outsourced so u too get ready to find other job in Mac Donald or wall-mart And all your jobs r here , Below in this links.

    http://www.informationweek.com/news/199601616?pgno=2&queryText

    http://en.wikipedia.org/wiki/IBM_India

    http://modernpatriot.blogspot.com/

    http://www.theburningplatform.com/?p=28624

    http://www.istockanalyst.com/article/viewarticlepaged/articleid/5640311/pageid/2

    Now JP Morgan chase will cut more jobs and outsource (transfer most of the jobs to overseas), most of there work force , so ready to get fired.

    http://www.businessweek.com/globalbiz/content/mar2009/gb2009039_431274.htm

    http://articles.economictimes.indiatimes.com/2011-02-14/news/28540403_1_government-bailouts-outsource-top-banks


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