Robert Reich: Corporations Don’t Need a Tax Cut, So Why Is Obama Proposing One?

[Better Believe It]

Corporations Don’t Need a Tax Cut, So Why Is Obama Proposing One?
by Robert Reich
February 23, 2012

The move is supposed to be “revenue neutral” – meaning the Administration is also proposing to close assorted corporate tax loopholes to offset the lost revenues. One such loophole allows corporations to park their earnings overseas where taxes are lower.

Why isn’t the White House just proposing to close the loopholes without reducing overall corporate tax rates? That would generate more tax revenue that could be used for, say, public schools.

But now the federal budget deficit is ballooning, and in less than a year major cuts are scheduled to slice everything from prenatal care to Medicare. So this would seem to be the ideal time to raise corporate taxes – or at the very least close corporate tax loopholes without lowering corporate rates.

It’s discouraging. The President gives a rousing speech, as he did on December 6 in Kansas. Then he misses an opportunity to put his campaign where his mouth is.

Read the full article at:

http://www.commondreams.org/view/2012/02/23

[DirkGently]

1. Corporate tax holidays or "fiscal responsibility." Pick one.

Can't have both.

[xchrom]

2. Du rec. Nt

[TheWraith]

3. Because doing it this way is beneficial for small businesses.

Small businesses pay lower taxes. Big business pays higher taxes by virtue of not getting loopholes. It's not exactly rocket science, and it's the sort of thing that Democrats are supposed to support, particularly in a tough economy.

[Better Believe It]

6. It's even more beneficial for Wall Street and big business! Cool!

So small business will once again be left twisting in the wind.

Do you think that Obama never thought of limiting business tax cuts to small businesses rather than giving the lions share of the cuts to big corporations and Wall Street "The Wraith"?

Damn ..... Obama just never thought of that!

Sure he didn't.

Anyone else like to share other talking points in defense of tax cuts for Wall Street and corporate tycoons?

[TheWraith]

16. No, it's not. Do you ever feel guilty for simply making shit up?

There's a reason that the right-wing is fighting it tooth and nail, and it's not because it helps big business.

[Jakes Progress]

31. Both views are simplistic.

Big business doesn't mind. They will pay their lobbyists and accountants to come up with whatever loopholes are necessary - again. Big business will not pay their way no matter what.

The reason they are "fighting it tooth and nail" is because the words came from Obama. If the same words came from mittsy, it would be fine.

[SunsetDreams]

13. Something else here: NRF Welcomes Obama Proposal to Lower Corporate Tax Rates

The National Retail Federation today welcomed President Obama's promise to seek corporate tax reform and lower corporate tax rates as he sent his annual budget proposal to Congress, saying the move would help retailers and other businesses create jobs.

"Lower corporate tax rates for retailers would mean lower prices for consumers, and that would result in increased demand for merchandise, helping to create jobs throughout the economy," NRF President and CEO Matthew Shay said. "Whether you are a manufacturer or a retailer, high taxes drive up costs and make it difficult to create the jobs out-of-work Americans are looking to fill. Lower taxes will make U.S. businesses more competitive at home and abroad, and will result in a more prosperous America."

"While the budget overall is always a contentious issue, corporate tax reform is a unique bipartisan opportunity," Shay said. "American companies face the second-highest corporate tax rates in the world, and virtually everyone agrees that the time has come to do something about it. Tax reform is a chance for the two parties and all factions to work together to help restore the United States' leadership in the global economy."

http://www.marketwatch.com/story/nrf-welcomes-obama-proposal-to-lower-corporate-tax-rates-2012-02-13

In a tough economy, it follows that you have to do things differently.

[trof]

4. I'll betcha this:

If ALL corporations paid 28% (or whatever) on profits, with NO loopholes, write offs, or 'special treatment', I bet the treasury would take in a hell of a lot more money than they do with a 35% (or whatever) rate that no corp really pays.

Wanna bet?

[Better Believe It]

8. Can you provide a link to a legislative bill that will actually do that?

If and when you can, we could bet on the passage on such legislation that would actually accomplish your dream!

Wanna bet?

[madokie]

5. The end result will be the government gets more taxes by closing loopholes

I believe I heard the President saying something to that effect when I heard him talking about this. This way they know how much the taxes, both the government and the corporation/company owes and theres not getting around it. sounds like a good idea to me.

[Better Believe It]

10. That's called campaign propaganda and rhetoric. It ain't gonna happen!

Wall Street and corporate lobbyists will write the bill using the legislators that have been bought and paid for.

I don't think they'll be raising their taxes anytime soon!

[blue neen]

14. Oh, it's campaign time then.

Good. Now we can all work together to get Democrats elected and re-elected!

[SunsetDreams]

15. Yay!!! I'm with ya! Democrats 2012!

[Better Believe It]

17. Campaign rhetoric soon to be forgotten the day after the election. Isn't that right?

Remember "change we can believe in"?

[blue neen]

20. Then you are acknowledging that it is campaign season if you are calling it campaign rhetoric.

I happen to be supporting Democrats right now, and that includes the President.

It's campaign season. We're trying to elect and re-elect Democrats. Isn't that right?

[FSogol]

25. Most of us are trying to re-elect Democrats.

Some just post their twice daily attack pieces.

[madokie]

22. What ever makes you happy

[bvar22]

26. Any guess as to what the inevitable "compromise" will be?

My best guess:
*Lower Corporate rates

*Loopholes remain mostly intact

...but it will be "historic", "pragmatic",
and a "step in the right direction."



You will know them by their WORKS,
not by their excuses.
[font size=5 color=green]Solidarity99![/font][font size=2 color=green]
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[indepat]

7. It's the right thing, the far too right thing to do imo, but not

unexpected. The far right thing to also do is slash Medicare and Medicaid as is also in the works. Surely every poor person and senior and all who someday might be poor/will be a senior if they live would rather absorb significant cuts to these programs than for large, profitable corporations to have to pay their fair share of taxes: it's the only right thing to do.

[jannyk]

9. K&R!

[Lil Missy]

11. The loopholes cost more in revenues than decreasing the rate and every corporation pays.

Enron paid no taxes at all. There are several large corporations that still pay no tax at all.

[Better Believe It]

18. Let me know if and when legislation is proposed to close those corporate/Wall Street loopholes.

[bahrbearian]

12. K&R

[Jakes Progress]

19. Reich is one of my go to guys for this stuff.

If he calls foul, then it stinks.

He's a rarity in Washington - a man with wit, skill, and humanity. He knows numbers, he knows politics, and he tells the truth.

[mucifer]

23. Mr NAFTA?

[Jakes Progress]

32. I see you speak fluent MSM

with a slight "common sense" accent.

Check out Reich's blog. http://robertreich.org/

Then explain why he is wrong in them. Show me where you find the error in "Never before in the history of our Republic have so few spent so much to influence the votes of so many." or "Funny, I don’t hear Republicans rail against speculators. Could that have anything to do with the fact that hedge funds and money managers are bankrolling the GOP as never before?" or "The fundamental problem isn’t the decline of American manufacturing, and reviving manufacturing won’t solve it. The problem is the declining power of American workers to share in the gains of the American economy."

Of course if you don't mind arguing without any real knowledge of that which you argue, you can just toss out the cliches and duck.

[Honeycombe8]

21. Something that is revenue neutral is not a tax cut, IMO. I think corps can't take a tax increase

right now. My employer is feeling the recession, as are others.

I don't want any more layoffs. Corps start laying off when they get prepare for possible future expenses, and esp if they get scared about them.

[Better Believe It]

29. Corporations lay off workers when they have less fewer customers and can get the work ....

done with fewer employees. The Republican claim that lower corporate taxes will create jobs and prevent layoffs is total bull shit.

Big business and Wall Street CEO's don't layoff people because they are "scared" of taxes.

They automatically oppose paying taxes along paying living wages and good worker benefits.

It's the nature of the "corporate beast"!

[quaker bill]

24. Because he wants to run on tax fairness

not tax increases. If you get rid of the dodges and loopholes now, any increase in rate later will actually produce revenue. As it is now, an increase in rate drives money toward the loopholes, the simplest is to off-shore profits. Once you cut off the loopholes this problem is avoided.

If you cut off the dodge of off-shoring profits to avoid taxes, then republicans will no longer feel the need to offer major tax discounts to get the corps to bring the money back here. There are literally trillions of dollars of profits kept off-shore to avoid taxes. If we are going to tax them anyway, there would be no point in doing this.

[Dragonfli]

27. Good Move, lower the rate, close some smaller loopholes, STARTING proposal = budget neutral

End result of "sausage making" = lower rates/loss of tax income

It will only take a committee or two to take out the parts about closing loopholes for the biggest donors (on each side).

End result should be a lower corporate tax rate with most loopholes intact, excellent job, this will help to fill the Obama superpac coffers. That is all that matters now that we all love SuperPac money.

He is better than most Republicans at their own game while achieving more for his donors than they are likely to, he will likely win this thing.

[Better Believe It]

28. The progressive alternative: End corporate tax loopholes, enforce the 35% corporate tax rate.

[sad sally]

30. Does anyone (including the President) think closing loopholes and changing tax law can be done in an

election year?

Those with long memories may recall the two-year so-called congenial bipartisan congressional efforts it took to pass major tax reform in 1986 (remember special interests stuffing box-wine drinking Bob Packwood's pockets with scraps of paper that what would become law?). With todays we hate each other congress, who rarely do anything other than bow down to campaign contributors, how long would it take to even start working on tax reform?

Repeating my earlier conclusion on this subject, having the expectation that because the President said he wants to lower corporations tax rates and get rid of loopholes will happen anytime soon or have any immediate influence on deficit reduction with raised revenues is like believing in the tooth fairy.

Tax reform won't create any jobs or boost the economy in the short run; it could take anywhere from two to five years to see any benefits (after its passed), particularly in the way corporations operate. And if true tax reform is actually taken on by our do-nothing congress, you can bet individual taxpayers' loopholes will also be on the table - like mortgage interest, property taxes, health dare costs and state income tax deductions.

According to the IRS, only 34% of 2008 tax filers itemized their deductions. Those individuals who benefit from tax loopholes will hardly give up them up without a fight.

How can anyone honestly think that in an election year this anything but political campaign red-meat. Does anyone believe that congress - those folks who junked up the tax code for their contributors - would tackle this now? Washington players - the President and congress - go for the quick fixes - this ain't one.