President Obama last week released a “framework” for reform of U.S. corporate and small business taxes that would be in addition to recommendations in his 2013 budget for significant changes in individual taxes. Many of the business tax proposals were included in the President’s budget as well.
Obama said the framework would simplify the tax code, lower the corporate rate, eliminate dozens of tax loopholes and subsidies, promote job creation and boost U.S. manufacturing.
According to Diane Lim Rogers, chief economist for The Concord Coalition, the theme of the business tax proposals “is similar to the whole package of tax proposals in the budget: keep statutory marginal tax rates low (or even lower) on everyone, but pay for those lower rates by broadening the tax base in ways that raise burdens on certain types of businesses – those who currently take the most advantage of the tax-expenditure holes in the tax base.”
In a recent blog posting, Rogers gave the tax proposals in the President’s budget a mixed review: “Some of his suggestions are new and would move the country’s unfair, inefficient and overly complex tax system in a positive direction. But some of the most costly proposals are the ones we’ve seen many times before.”
She expressed particular disappointment that the administration’s plan would fail to maintain current-law levels of revenue, in part because it would not offset the cost of its proposed extension of most of the Bush tax cuts.
But Rogers praised the administration’s version of the “Buffett rule,” which states that no household making over $1 million a year should pay a smaller share of its income in taxes than middle-class families pay. By reducing tax expenditures rather than raising marginal rates, Rogers said, the administration’s approach “could serve as a segue to achieving base-broadening tax reform.”
Read more with Tax Policy in the President’s Budget
External links:
Statement by President Obama on Corporate Tax System
The President’s Proposal to Limit Itemized Deductions Is Still a Great Idea
The President’s FY 2013 Budget
President’s Framework for Business Tax Reform
