By Jim Puzzanghera and Kathleen Hennessey, Los Angeles Times. February 22, 2012
President Obama's proposal to lower the corporate tax rate to 28% from 35% shows a growing consensus in Washington that many companies need to pay less in taxes for the U.S. to stay competitive globally.
But exactly how to do that â and which companies should pay more to make up the difference â remains elusive in a volatile election year.
Democrats and Republicans have starkly different ideas about how far to lower corporate tax rates and whether changes to individual tax rates, including the Bush-era cuts that expire at the end of the year, should be part of the reform debate.
Obama laid down his marker Wednesday with a 23-page framework for a plan to eliminate dozens of breaks for specific industries, particularly oil and gas production, and new incentives for domestic manufacturing and alternative energy.
"Our current corporate tax system is outdated, unfair and inefficient," he said. "It provides tax breaks for moving jobs and profits overseas and hits companies that choose to stay in America with one of the highest tax rates in the world."
Key Republicans welcomed Obama's call for a lower corporate rate. But they said his proposal wouldn't reduce the rates enough and that his broad framework needed much more detail.
The GOP also wants to tackle corporate and individual taxes at the same time, laying the groundwork for a nasty and complex battle this fall as Republicans fight to save all the Bush tax cuts. Obama wants to let the tax cuts expire for households making more than $250,000 a year.
"It's official: President Obama, congressional leaders of both political parties and the Republican candidates for president all support lowering corporate tax rates," said John Engler, president of the Business Roundtable, a top industry trade group. "Now let the debate begin."
Legislative action on taxes probably will have to wait until after the November elections because the topic is tightly intertwined with key campaign issues, including how best to boost job creation, how to limit the growing size of government and whether large corporations and wealthy individuals are paying their fair share.
President Obama's proposal to lower the corporate tax rate to 28% from 35% shows a growing consensus in Washington that many companies need to pay less in taxes for the U.S. to stay competitive globally.
But exactly how to do that â and which companies should pay more to make up the difference â remains elusive in a volatile election year.
Democrats and Republicans have starkly different ideas about how far to lower corporate tax rates and whether changes to individual tax rates, including the Bush-era cuts that expire at the end of the year, should be part of the reform debate.
Obama laid down his marker Wednesday with a 23-page framework for a plan to eliminate dozens of breaks for specific industries, particularly oil and gas production, and new incentives for domestic manufacturing and alternative energy.
"Our current corporate tax system is outdated, unfair and inefficient," he said. "It provides tax breaks for moving jobs and profits overseas and hits companies that choose to stay in America with one of the highest tax rates in the world."
Key Republicans welcomed Obama's call for a lower corporate rate. But they said his proposal wouldn't reduce the rates enough and that his broad framework needed much more detail.
The GOP also wants to tackle corporate and individual taxes at the same time, laying the groundwork for a nasty and complex battle this fall as Republicans fight to save all the Bush tax cuts. Obama wants to let the tax cuts expire for households making more than $250,000 a year.
"It's official: President Obama, congressional leaders of both political parties and the Republican candidates for president all support lowering corporate tax rates," said John Engler, president of the Business Roundtable, a top industry trade group. "Now let the debate begin."
Legislative action on taxes probably will have to wait until after the November elections because the topic is tightly intertwined with key campaign issues, including how best to boost job creation, how to limit the growing size of government and whether large corporations and wealthy individuals are paying their fair share.