What Everone Needs to Know About Obama's Costly Corporate Tax Cut, and How to Fix It: [View all]

[grahamhgreen]

As we work to get Obama re-elected, let's also put pressure our Rep's to fix this latest tax decrease on corporations which will increase the burden on the rest of us.

Here is the critical issue, CUTTING THE RATE AND CLOSING LOOPHOLES WILL DECREASE REVENUES!

From the NYT:

"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.

Even so, the administration and Congress would have a political and mathematical challenge in eliminating or reducing tax breaks enough to lower corporate rates as they propose to do without adding to deficits. Underscoring the difficulty, just two popular tax breaks — for accelerated depreciation of businesses’ capital investments and write-offs of research and experimentation costs — account for the bulk of the revenue the government foregoes to benefit corporations.

Not only are those two provisions unlikely to be repealed; the Obama administration and both parties in Congress also support making a separate research credit permanent. " http://www.nytimes.com/2012/02/22/business/economy/obama-offers-to-cut-corporate-tax-rate-to-28.html?_r=1&pagewanted=all

So, Obama has proposed a straight up tax cut to the very same corporations that are corrupting our democracy and outsourcing our jobs.

How to make sure this doesn't happen: We must make sure that any proposal is vetted and scored by the Joint Committee on Taxation and the OMB. Any proposal that does not come out with a net tax gain must be scrapped, seems to me.