35% Is Way Too High For Corporate Taxes

RCM ^ | 01/29/2013 | Robert Pozen

[SeekAndFind]

If there's one policy agreement between Republicans and Democrats, it's that the 35% corporate tax rate in the United States should be reduced to 28% or 25%. The current rate, highest in the advanced industrial world, disincentivizes investment and encourages corporations to relocate overseas.

Unfortunately, the deficit is a major hurdle facing any proposal to reduce the corporate tax rate. Because of the fiscal pressures facing the government, most politicians recognize that any corporate tax rate cut must be paid for by eliminating tax preferences and "loopholes." But few politicians have identified enough revenue-raising measures to offset the cost of a significant reduction of the corporate tax rate-cutting the rate from 35% to 25% would cost roughly $1.2 trillion over ten years.

I believe that there is a sensible answer: a modest limit to the deductions that corporations claim for the interest they pay on their bonds and other debt.

Admittedly, interest deductions probably won't be the first target for politicians. Most likely, politicians will first take a close look at the myriad of provisions designed to benefit specific industries. For instance, the fiscal cliff deal extended tax benefits for car racing facilities, railroads, mining companies, and various alternative energy companies. Indeed, many of these preferences have highly suspect economic justifications; unfortunately, these special deals are too small for their repeal to raise a significant amount of revenue.

Politicians might then turn to some of the larger tax preferences that corporations enjoy, collectively known as "tax expenditures." However, they will likely find it unwise, or politically infeasible, to repeal any of these large tax expenditures, such as accelerated depreciation or the research and development credit. Most Democrats and Republicans view these policies as being essential to economic growth.

[SeekAndFind]

Mitt Romney proposed to lower corporate taxes to 25%.

That ain't gonna happen for the next 4 years.

[JRandomFreeper]

Romney lost because he was a NE liberal.

/johnny

[Wolfie]

If corporations are individuals, as per Citizens United, then why do they have a special tax rate to begin with?

[Noamie]

Obama was very specific in, I think, 2 of the debates that he would lower the corporate income tax rate.

I keep wondering why the Republicans didn’t move on that immediately.... but, then again, they’re just so stupid.

[Made In The USA]

“If there’s one policy agreement between Republicans and Democrats, it’s that the 35% corporate tax rate in the United States should be reduced to 28% or 25%. The current rate, highest in the advanced industrial world, disincentivizes investment and encourages corporations to relocate overseas.”

So... shouldn’t such thoughts apply to American citizens (across Federal, State, and all the bureacracies therein)for precisely the same reasons? Can we get the libtards and spineless idiots in the GOP to sign on?

[needmorePaine]

If there's one policy agreement between Republicans and Democrats, it's that the 35% corporate tax rate in the United States should be reduced to 28% or 25%.

I would say 0%.

[Trapped Behind Enemy Lines]

Corporations really don’t pay taxes at all. Never have and never will. They COLLECT taxes. To a corporation a tax is expense, a cost that is eventually passed on the consumer, the end user of its products and services. Corporate taxes are really hidden sales and VAT taxes.

[fhayek]

People always looks at me like I am crazy when I say that corporate tax rates should be 0%, but anything higher double taxes income - once when the comporation earns it, and once when it is distributed to individuals via dividends. Reduce the rate to 0% and then get out of the way of the economic boom.

[needmorePaine]

The federal minimum wage should be gone too.

[Liberals are Evil Socialists!]

What is crazy is assuming a reduction in tax rates will reduce government collection of taxation. The point is to spur development and that more private sector economic activity spurs economic recvenues for taxation. That 8 to 10 percent sucked into the government does not help the private sector grow business, hire people or create even more taxable revenues. Allowing that money to stay with businesses, does.

See, this is WHAT EVERYONE IS MISSING. Simply cutting the tax rate does not automatically reduce a dollar for dollar reduction in tax collection. That depends on the economic activity and with more economic activity due to more money remaining available in the private system, then more money will be spent, more transactions and jobs created, and more taxes collected.

DO NOT FORGET THIS CRITICAL LINK IN DEFEATING THE LIES OF THE LEFT. IT IS CRITICAL !!!!!!!!!!!!!!!

[thackney]

You may be crazy,
But it just may be the lunatic we’re looking for

[Georgia Girl 2]

Corporate tax rate should be 15% max.

[Alas Babylon!]

It IS critical—you are right.

Also, corporate taxes are business expenses that get passed on to consumers by adding to the price of the goods or services they buy. So corporate taxes = consumer taxes.

[GrouchoTex]

Absolutely, 100% correct. If all Amercans understood this simple fact (that the Gov’t ignores, or tries to), we could be on to a real change of heart among the populace.