The United States has one of the corporate income tax rates in the industrialized world. Along with one the highest corporate income tax rates, the United States has one of the most complex and unpredictable set of deductions in the federal tax code. According the the Internal Revenue Service, Corporations paid $248 Billion in income taxes to the federal government in 2009 and claimed $1.34 Trillion in deductions at the same time. Currently corporations can claim up to 100% of their gross income for several federal tax deductions. In order to lower and tax rates from 35% to 25% the federal government could reduce the 100% allowed deductions to 70% of income. While most suggest that the corporate tax rate should be cut they must also realize that such a cut would be universally unacceptable if the taxes did not remain revenue neutral. In the current presidential election there is a stark difference of opinion between the two candidates. While President Obama does not have a platform to run on for his second term and has only resorted to criticizing his opponents plan, he has suggested his desire to raise the corporate income tax rate to 43%. The goal of the President in this instance is to bring down the $16 Trillion debt by bringing in more revenue to the government from corporations that have often taken huge deductions. He is right that corporations have enjoyed large deductions for many years, however, there is much question as to how such a policy would foster job creation and investment. Mitt Romney has proposed to reduce the federal corporate tax rate from 35% to 25% if he is elected president. However, his plan needs to be revenue neutral, therefore, he has proposed to close federal income tax loopholes for corporations. By doing this, all corporations will be able to play by the same set of rules and larger corporations that have traditionally resorted to deductions will have to pay more and smaller corporations will be able to enjoy a lower tax rate and will have an incentive to hire workers and invest in the United States.
Sources: Pozen, Robert C. "The right way to cut corporate taxes." Washington Post 5 Oct. 2012. Global Issues In Context. Web. 26 Oct. 2012
I disagree with the point you made about President Obama simply is criticizing Mitt Romney and has "no platform." He in fact has a plan and wants to reduce the corporate tax rate to 28%.
ReplyDeleteThe data you have is incorrect in saying President Obama wants to raise the corporate tax rate to 43%. He actually wants to lower the corporate tax rate and give companies that pay their taxes in the United States a foreign tax cut. Plus, the tax rate for American manufacturers would not succeed 25% under the President's plan in order to create more American jobs.
http://money.cnn.com/2012/09/07/news/economy/corporate-taxes/index.html
Make sure all your information is facts before you argue a point.