OPINION:
President Obama can never quite pull off the impression of being bipartisan and cooperative. When he tossed out possible corporate tax reform ideas to appear business friendly, Republican leaders weren’t impressed.
House Speaker John A. Boehner’s spokesman Michael Steel called the president’s offer “a red herring” to distract from discussing the tax hikes on small businesses that hit Jan. 1.
“The White House is offering nothing new on corporate reform, other than fishing for business support to raise tax rates on individuals, small businesses and pass-through companies,” Rep. Kevin Brady, Texas Republican and member of the tax-writing Ways and Means Committee, told The Washington Times. Mr. Brady believes raising individual tax rates now makes it “highly unlikely” we’d see corporate tax reform “in 2013 or the foreseeable future.”
Mr. Brady also noted that the “new” White House plan was cut-and-pasted from a white paper the administration half-heartedly released in February. It calls for reducing the tax rate to 28 percent, but it would add loopholes and “clean energy” credits for Mr. Obama’s liberal allies while oil companies and other affordable energy producers would be punished.
The House budget called for cutting out loopholes and deductions, lowering the rate to 25 percent and moving toward a territorial tax system. After Japan lowered its corporate rate in March, the United States became the least attractive place for business in the developed world. The average rate among Organization for Economic Cooperation and Development nations is 25 percent, while the U.S. rate is 35 percent with an average of 4.2 percent in state and local taxes tacked on top.
According to a Heritage Foundation analysis in 2010, lowering the rate to 25 percent would result in creating 581,000 private-sector jobs a year through 2020. A family of four’s after-tax income would rise by $2,484 per year.
The president has been trying to woo business leaders into getting behind his tax hike agenda. On Nov. 28, he met at the White House with CEOs from companies including Comcast, Pfizer, Home Depot, Goldman Sachs and Caterpillar. These executives pushed him to lower the corporate rate and shift to a territorial tax system that would bring an estimated $1 trillion back to our shores.
Other business leaders have decided to throw their poorer counterparts under the bus. The Business Roundtable sent a letter from 160 of the CEOs the organization represents endorsing higher income tax rates to avoid going over the fiscal cliff.
The move angered National Federation of Independent Business President Dan Danner, who represents many small-business owners likely to pay those newly hiked individual income taxes. “It’s easy for big business to point to another group and say ’raise their taxes,’ ” said Mr. Danner.
The president has not budged an inch from his irresponsible tax-and-spend plans in fiscal cliff negotiations. Republicans should push to include lower corporate taxes in a final deal, but not in exchange for higher taxes on small businesses. Our tax policies need to encourage investment and hiring in America if we want to see the economy once again thrive.
Emily Miller is a senior editor for the Opinion pages at The Washington Times.
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