Obama proposes cutting corporate income tax to 28 percent

I think I've seen conservatives here propose cutting the current 35% corporate income tax rate (to around 25% if I recall) and eliminating loopholes, subsidies, and tax shelters.

Well, President Obama is now proposing doing pretty much that, but setting the rate at 28% and 25% for manufacturers.

Right now corporate taxes paid varies all over the place and it's hard to tell just what the average is.

Taxes vary more by industry here than abroad, according to a study released in February by Kevin S. Markle of Dartmouth and Douglas A. Shackelford of the University of North Carolina. At the high end, American retailers paid 31 percent in total income taxes, construction 30 percent and manufacturers 26 percent. Financial services companies paid an average of 20 percent, real estate 19 percent and mining 6 percent.

http://www.nytimes.com/2011/05/03/business/economy/03rates.html

It appears the proposed 28% rate would be revenue neutral, although some Republicans disagree.

An analysis in November from Congress’s nonpartisan Joint Committee on Taxation, which was requested by House Democrats, reported that even if every corporate tax break were scrapped, the 35 percent corporate rate could not be reduced below 28 percent without adding to deficits. Republicans disputed that, citing a group of relatively obscure tax breaks that the Congressional analysts did not count.

http://www.nytimes.com/2012/02/22/business/economy/obama-offers-to-cut-corporate-tax-rate-to-28.html?pagewanted=2&_r=1&src=un&feedurl=http://json8.nytimes.com/pages/business/economy/index.jsonp

I know some conservative don't want any corporate income tax at all, but let's face it... it's not going to happen with the current candidates (maybe Ron Paul?). So does Obama's proposal give you what you've been asking for?

The questioon is, is it enough to attract companies back to the US? Canada's rate is about 15%...not because they want to do special favors for they big guys, but because they are smart enough to understand economics...unlike most of our Dems. Good for Obama for growing a few brain cells, although still not enough to make a big difference.

Bravo! My company is paying the full rate and I would like relief going to our employees with bigger bonuses.

And comparing other countries corporate tax rates foolhardy at best. Lower corporate rate, but higher value added taxes might mean that the cost of doing business in America's Hat winds up being higher.

Obama comes up with a new tax idea every other week or so, he needs a Roulette wheel to spin.

28% is still too high. Especially with up to a 43% tax on dividends.

Yawn....

When he actually starts to lead, rolls up his sleeves, sits down with congressional leaders and works on real legislation, I may start to pay attention. Until then its just another campaign scheme.

He flip flops more than the trout I caught saturday.
Grasping at anything to keep him in the WH.

Joe wrote: Obama comes up with a new tax idea every other week or so, he needs a Roulette wheel to spin.

28% is still too high. Especially with up to a 43% tax on dividends.

Yawn....

When he actually starts to lead, rolls up his sleeves, sits down with congressional leaders and works on real legislation, I may start to pay attention. Until then its just another campaign scheme.

Yes, part of the Obama proposal includes what he has always wanted, eliminating the Bush tax cuts for those making over $200K/$250K. And that means those people would go back to paying tax on qualified dividends at the same rate as ordinary income. The tax rates on nonqualified dividends have always been taxed the same as ordinary income (since 2003 at least). And the 43% you mention would be worst case for those in the highest tax bracket.

But the tax on dividends is an entirely different subject than the corporate income tax. And I agree we shouldn't increase taxes on dividends. It's a double tax. Corporations already pay a tax on their profits, then share the profits partially in the form of dividends. Those individuals who get the dividends, then have them taxed again.

My main point is that Obama's proposal on the corporate income tax seems to me what conservatives have always been asking for. It is basicly a flat tax where all corporations pay the same rate, and loopholes are eliminated. Isn't that what they want? Are they now opposing it only because it's now coming from Obama?

We can argue if the flat 28% rate is too high. My main concern would to make sure it is not an overall tax increase on corporations. From the link I gave, it seems Congress's own nonpartisan Joint Committee on Taxation says if you set the flat rate lower, it will increase the deficit. And I don't think we want that to happen.

I would say let's give it a try. The sooner the better. I heard folks on the radio this morning saying the idea is a "non-starter" in an election year. Apparently politicians don't want to make waves that might jeopardize their reelection bid. So I have to wonder if it's rhetoric or is the President serious about cutting corporate taxes. If he is, I don't care WHOSE idea it is. As long as it's good for America and will breath some life into our lethargic economy.

I say bring it baby.