With only a couple of months ahead the presidential elections, Barack Obama begins to pull out his aces. His proposals look at precisely the biggest issues of today’s U.S. economy, an area that electors are particularly interested in. Obama’s last electoral pitch is his 28 percent corporate tax rate.
Although the 28 percent corporate tax rate isn’t exactly official, a source with the administration told CNN that the actual deduction will be made official today. The administration official divulged that the president’s proposal includes reducing the corporate tax from 35 percent to 25 percent and removing tax breaks for companies in an attempt to help them offset lost revenue.
The proposal itself is good news for today’s business environment, as it would be able to remove most of the numerous tax breaks. In the end it will allow the current manufacturing segment some relief and space for development.
The official, who remained anonymous, added that Obama’s proposed tax reform will “enhance American competitiveness by simplifying the tax code and eliminating dozens of tax loopholes and subsidies, incentivizing job creation and investment here at home”.
Just a few days ago, Treasury Secretary Timothy F. Geithner said: “There is, I hope, more room for common ground on this, and we need to use this opportunity now to start to lay the foundation for the fundamental change ahead”.
Geithner added that the tax plan “will help level the playing field for business and allow the government to collect needed revenue while promoting economic growth”.
In January, Obama addressed the Congress on the tax break issue. “Right now, companies get tax breaks for moving jobs and profits overseas”, he began his argument. “Meanwhile, companies that choose to stay in America get hit with one of the highest tax rates in the world. It makes no sense, and everyone knows it. So let’s change it!” urged the president.
However, the tax plan, as good as it sounds, still has to be approved by the Republicans. At the same time, it will also be opposed and lobbied against by corporations that would be losing tax breaks they currently receive.