President Obama–the same President Obama who is allegedly engaging in “class warfare” and supposedly out to tax “job-creators”–has announced a plan to “lower the corporate tax rate from 35% to 28%.” Read all about it.
One thing to keep in mind before arguing about what this plan means is that it is a plan that is being proposed. Meaning that if anything ever does come of it, it will probably be completely different than it is now, once all the different interests have hashed it out.
But, just for fun, let’s talk about it. Apparently, idea is that in exchange for these tax cuts, “corporations would have to give up dozens of loopholes and subsidies that they now enjoy. Corporations with overseas operations would also face a minimum tax on their foreign earnings“, according to the Associated Press article.
Okay, but here’s the thing: ultimately whether it comes under the label “taxes”, “loopholes”, “subsidies” or what have you, there is ultimately only one question: do the corporations get more money as a result of this plan or less? I’d like to see some sort of estimated balance sheet that gives some idea whether corporations, if treated as a monolith, win or lose from this plan. I won’t hold my breath, though, because it’s going to be virtually impossible to get good reporting on that.
More to the point, even if you somehow did find that out, we would then have to drill down into the details of which corporations will lose and which will win, and then try to figure out if they’re the right ones. Which is always a gamble, because it’s basically the same problem as trying to pick winners. And then of course, as the AP article points out it is unlikely that any of this will happen in an election year, and thus, even assuming Obama does get re-elected, it’s unknown what the Congress will look like next year.
This is why the idea of getting rid of the whole tax code appeals to people. It appealed to me, in my Libertarian days, until I realized that since taxes in some form are necessary to run a government, there would have to be new one installed, and in the course of installing it, all the same problems would immediately recur.
While we’re on the topic, why is Obama doing this, if such a class-warrior he is? Is he just as beholden to the corporate interests as his Republican opponents. I don’t know, but I know some Democrats who are going to think so.
Long-time readers might remember when I asked the question “was Theodore Roosevelt a socialist?” I said at the time that I thought T.R. “was merely a pragmatist, and found that the easiest way to thwart radical socialism was to allow for moderate socialism.” The same argument could apply here, if we ask “is Obama out to aid the corporations?”* Well, yes, but not as much as the Republicans are. The easiest way to thwart radical corporate tax cuts is to allow for moderate ones.
*I did not ask “is Obama a Capitalist?” for reasons which are long and complicated. The short version is that, in my view, very few people can actually be said to be “capitalist”, as almost all countries, governments, and corporations engage in some scheme of artificial wealth redistribution, which, according to some Republicans makes them “socialist”. By their definition, almost everything short of anarchy is socialism. Also, of course, helping corporations isn’t quite the same as being a capitalist, but it’s not being a socialist either.
It’s just campaign bullshit and nothing more. Yes, it would slightly lower corporate income tax but it would also apply American taxes to profits made solely overseas.
It’s nothing but a ploy to get the GOP to have to vote against something that Obama and his pet media will portray as pro-business.