Obamanomics: Open New Tax Loopholes to Close Old Tax Loopholes
I'm sure Timmy can explain this one. . .
WASHINGTON (AP) — Cutting corporate tax rates and deleting loopholes is just what most economists prescribe for the tangled U.S. tax code.
So why isn’t everyone cheering the plan President Barack Obama unveiled Tuesday to slash the top corporate tax rate and end breaks that let some companies pay little or nothing in taxes?
Economists note that Obama’s plan would upturn the very playing field the administration says it wants to level. It would give manufacturers preferential treatment: Tax breaks would effectively cap their rate at 25 percent. Other companies would pay up to 28 percent.
The current top corporate tax rate is 35 percent.
Some say such varying rates can distort the economy by diverting investment into some industries and away from others that might pack a bigger economic punch.
“The administration is not making sense,” says Martin Sullivan, contributing editor at publisher Tax Analysts. “The whole idea of corporate tax reform is to get rid of loopholes, and this plan is adding loopholes back in.”. . .
- Greg Pollowitz