Obama proposes lower corporate tax rates in SOTU
In his State of the Union address Tuesday night, President Barack Obama outlined a plan to lower corporate tax rates and close loopholes that make it easier for certain lobbyists and companies to work the system in their favor. He plans to do all this without adding to the national deficit, which will likely insight a fierce political debate across both sides of the aisle.
The reason for his desire to lower tax rates, Obama said, stems from the fact that many in the business world are able to rig the system in their favor and end up having to pay no taxes, leaving other businesses to make up the difference.
"Get rid of the loopholes. Level the playing field," Obama said. "And use the savings to lower the corporate tax rate for the first time in 25 years – without adding to our deficit. It can be done."
However, it may not be the easy to accomplish. Lowering the tax rate, which currently stands at 35 percent, without raising the deficit, means that Obama will have to remove or reduce a number of tax reductions for the nation's largest corporations, which may not sit well with Republican leadership who want to see an overall tax reduction. Likewise, loosening rates may be criticized by Democrats who feel it is friendly to big businesses.
Despite the possibility of facing opposition from both sides, The Wall Street Journal reports that the Obama administration is in favor of corporate tax overhaul because it may be one of the few ways to both stimulate the economy without suffering the deficit deepening consequences. A number of companies, such as Wal-Mart and CVS have been in favor of the move saying that it makes more sense to allow corporations to make their own decisions rather than implementing tax incentives.