The Obama administration released the president’s proposals for overhauling corporate tax codes (PDF). At the centerpiece of his proposal is a reduction of the top corporate tax rate to 28 percent (NYT), down from 35 percent, with dozens of loopholes and subsidies eliminated in exchange. In addition to the corporate tax rate reduction, Obama’s plan would establish a minimum tax on multinational corporations’ foreign earnings to discourage relocation of production overseas or shifting of profits abroad.
At a White House event to mark the extension of the payroll tax cut Tuesday, President Obama urged Congress to pass additional legislation (ABC) to help the economy, including bills to assist small business owners and struggling homeowners. “Keep taking the action that people are calling for to keep this economy growing. This may be an election year, but the American people have no patience for gridlock,” he said.
With a still struggling economy, tax breaks and business incentives have been popular proposals for all the candidates running for office. GOP candidate Mitt Romney is expected to release his own tax cut plan (NRO) this week, either at Wednesday’s debate or in a speech Friday at the Detroit Economic Club.
To see more about the candidates’ positions check out CFR’s Issue Tracker on the Economy.
Suggested Other Reading:
This CFR Analysis Brief examines the fiscal 2013 budget and corporate taxes. It says Republicans and Democrats may be able to find common ground as both parties support a reduction in the U.S. statutory rate as a way to increase global competitiveness.
International Economy presents views of several influential economic thinkers on whether enactment of tax reform can fix the U.S. economy.
Robert Carroll of the Tax Foundation outlines the importance of tax deferral and low corporate tax rates for U.S. companies operating abroad to maintain competitiveness.
–Contributing Editor Liriel Higa