Would Obama's corporate tax cut speed the recovery?

The president wants to slash the tax rate on businesses — but raise corporate tax revenue by eliminating loopholes

President Obama wants to cut the top corporate tax rate from 35 percent to 28 percent, but increase corporate tax revenue by closing loopholes.
(Image credit: Ron Sachs/CNP/Corbis)

On Wednesday, President Obama proposed cutting the U.S. corporate tax rate from 35 percent to 28 percent. But the administration insists that this wouldn't deplete federal coffers. Instead, the plan would actually generate more revenue for the federal government, because Obama wants to eliminate loopholes and subsidies that allow many corporations to pay a lot less than 35 percent, and in some cases, zero. Obama is also proposing a minimum tax on foreign earnings. Is this sensible, overdue reform, or a recovery-killing tax hike in disguise?

The proposal would doom the recovery: "This is a terrible, terrible plan," says James Pethokoukis at The American. The stagnant economic recovery is already "arguably the worst in modern American history," and instead of giving corporate America a hand, Obama now wants to saddle companies with so-called reform that would "actually raise the tax burden on American business by $250 billion over a decade." That would make us less competitive than ever, and doom our chances of bouncing back anytime soon.

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