Cutting the Corporate Tax Rate: How Low Can You Go? (VIDEO)

On Wednesday February 22, 2012, the Obama Administration announced its proposal to cut the corporate tax rate from 35 percent to 28 percent.  This comes less than two months before Japan cuts its corporate tax rate (on April 1, 2012) to leave the United States with the highest corporate tax rate in the world.   Cutting the rate from 35 percent to 28 percent is a good start, but since 1992, the average OECD combined statutory rate has been lower than America’s and it has continued to fall. Today, it is nearly 10 percent lower (25.1 percent) than America’s 35 percent. Add in the state and local taxes that U.S.-based companies pay and the gap widens even further.  The appetite for corporate tax cuts may also be supported by a wide variety of folks and not just corporate big wigs.  According to The Hill, “The Hill Poll also found that 73 percent of likely voters believe corporations should pay a lower rate than the current 35 percent, as both the White House and Republicans push plans to lower rates.”

Hidden in the Obama administration’s 25 page proposal (see here) to cut the corporate tax rate, there were a number of baffling items and hidden tax increases such as eliminating tax preferences for oil and gas.  President Obama has said that the tax rate should not pick winners and losers.  According to the Obama plan, “the tax code currently subsidizes oil and gas production through tax expenditures that provide preferences for these industries over others.”  Yet, three pages later the proposal says to, “Extend, consolidate, and enhance key tax incentives to encourage investment in clean energy.”  So, the Obama administration wants to pick winners and losers after all.

The plan also says that “Fiscal responsibility also requires that revenue be increased as part of a balanced approach that asks the wealthiest to contribute more, while protecting the middle class from tax increases.”  What an amazing sleight of hand to call for a tax increase in your “tax cutting” plan.  Also, this looks like a threat.  If we don’t raise taxes on the wealthy we will have to raise taxes on the middle class.  The President should have kept it simple and just call for a reduction in the corporate tax rate and not include all of the other provisions that are nothing more than hidden tax increases.

I sat down and recorded some thoughts on why the Taxpayers Protection Alliance supports a real reduction in the corporate tax rate:

VIDEO 1

David Williams talks about cutting the corporate tax rate (Part 1)

VIDEO 2

David Williams talks about cutting the corporate tax rate (Part 2)

VIDEO 3

David Williams talks about cutting the corporate tax rate (Part 3)

VIDEO 4

David Williams talks about cutting the corporate tax rate (Part 4)

VIDEO 5

David Williams talks about cutting the corporate tax rate (Part 5)