Obama: Top Tax Rate Should Be 28% for Corporations, 40% for Small Business
The New York Times reports that President Obama is reviving an old proposal to lower the corporate tax rate from 35 percent to 28 percent (and 25 percent for manufacturers). Obama's push to lower the corporate tax rate to 28 percent comes less than a year after he raised the top individual income tax rate, paid by many small businesses, to 39.6 percent.
In a speech delivered Tuesday afternoon, Obama did not explain why he thinks it's a sound economic idea to raise the top marginal tax rate on small businesses but lower it for corporations.
"Right now, our tax code is so riddled with wasteful loopholes that many companies doing the right thing and investing in America pay 35%, while the corporations with the best accountants stash their money abroad and pay little or nothing at all," Obama said, according to the text of his prepared remarks. "I’m willing to simplify our tax code in a way that closes those loopholes, ends incentives to ship jobs overseas, and lowers rates for businesses that create jobs right here in America."
Neither Obama's Tuesday speech nor his February 2012 corporate tax reform plan explained in detail which loopholes would be closed. During the 2012 presidential campaign, the Obama campaign hammered Mitt Romney for not saying which loopholes he would close to pay for a proposed reduction in individual income tax rates.
Makes no sense. Small business is the backbone of the country. They should both be lowered.