The newly announced Obama Corporate Tax Cut has been thoroughly proctologized and found to be another Obama heist. While lowering the Corporate Tax to 28%, other significant tax increases are planned. Here are some of the best quotes on what a Corporate Tax Cut in the Time of Obama really means:
President Obama’s 2013 budget is the gift that keeps on giving—to government. One buried surprise is his proposal to triple the tax rate on corporate dividends, which believe it or not is higher than in his previous budgets.
Mr. Obama is proposing to raise the dividend tax rate to the higher personal income tax rate of 39.6% that will kick in next year. Add in the planned phase-out of deductions and exemptions, and the rate hits 41%. Then add the 3.8% investment tax surcharge in ObamaCare, and the new dividend tax rate in 2013 would be 44.8%—nearly three times today’s 15% rate.
Keep in mind that dividends are paid to shareholders only after the corporation pays taxes on its profits. So assuming a maximum 35% corporate tax rate and a 44.8% dividend tax, the total tax on corporate earnings passed through as dividends would be 64.1%.
“In his proposed rewrite, Obama will target oil and gas companies for tax hikes while promising special breaks for manufacturing companies, according to a senior administration official.”
That one sentence shows what this is really all about, going after oil and gas companies while hooking up unions, companies that tend to donate Democrat, and, I’m sure “green” energy will be included. Democrats, including Obama, have long wanted to removed tax breaks for oil and gas, because they’re, well, Evil in Liberal World. Announcing the removal allows Obama to play class warrior, and, if said breaks were actually removed, he could then claim that the gas price rise is a result of oil and gas companies being big meanies, rather than his own absurd energy policies.
So, we can see that the idea is simply to create a situation where corporations are paying more tax directly to the Central Government, rather then reducing the rate which would incent companies to spend more of the money they keep, spreading it around to workers and through the economy. Typical.
1. The Obama-Geithner plan would lower the statutory corporate tax rate to 28 percent from 35 percent, currently the second-highest among advanced economies. But that would still leave the combined U.S. corporate tax rate—state and federal—at 32.2 percent, far above the OECD combined average of 25 percent…
2. The Obama-Geithner plan would establish, according to the New York Times, a minimum tax on multinational corporations’ foreign earnings to discourage “accounting games to shift profits abroad” or actual relocation of production overseas.
So instead of a carrot, Corporate America gets the stick. Instead of lowering the U.S. rate to a competitive level, Obama would raise the penalty on keeping profits overseas. Indeed, the United States is a huge outlier in that it taxes the foreign profits of multinational companies.
As I look around at news reports on Liberal sites, I see talk about the elimination of deductions and loopholes, but nothing about how winners and losers are being hand-picked, or the triple tax on corporate dividends, or that that tax is higher even than he has proposed in previous years, or that American companies abroad are being penalized, nothing about reduced shareholder dividends increasing reluctance to invest.