|White House website; speech of 7/30/13|
Here is a summary from the White House website:
"Simplify the tax code for business
- End incentives to ship jobs overseas
- Lower tax rates for businesses that create jobs in the U.S.
- Lower tax rates for manufacturers
- Cut taxes for small businesses
- Put construction workers on the job rebuilding our infrastructure
- Expand our network of high-tech manufacturing hubs
- Strengthen job training at community colleges
- Raise the minimum wage"
We need more details. I'll offer a few things to think about for now:
- Does he plan to lower only the corporate tax rates or also those for individuals? Most businesses operate outside of the corporate form. Also, to pay for the lower corporate tax rate, he'd have to reduce business breaks and that would affect all businesses (probably).
- It looks like he still wants to lower the corporate tax rate in a complex and not fully transparetn way - by increasing the Section 199 manfuacturing deduction for certain industries.
- Does everyone want a lower rate? Remember that only the top 1% of individuals are in the top rates. Even many large corporations today use existing tax rules to reduce their effective tax rate to below 25%. A recent poll of small businesses by the US Chamber of Commerce found that 56% wanted a simpler tax law and only 22% wanted lower rates.
- Revenue neutral reform to lower corporate and individual rates to 25% which many Republicans are talking about will be hard pressed to find revenue unless they go after the bigger tax expenditures, such as the one President Obama has suggested about capping the benefit of certain deductions and exclusions at 28% and reducing the mortgage interest deduction.
What do you think?