Citizens for Tax Justice Critiques ”President’s Framework for Business Tax Reform”

Thursday, February 23, 2012 at 3:11 AM by

This morning the Treasury Department releasedThe President’s Framework for Business Tax Reform,”  which outlines the Obama Administration’s recommendations for corporate tax reform. The President’s plan still needs to be fleshed out, but Citizens for Tax Justice (CTJ) examined the initial framework today and issued a critical response.    
Some of the significant elements of the plan include the following cuts in corporate tax revenue:  reducing the statutory corporate tax rate from 35%to 28%, making certain temporary tax breaks permanent, and creating some new business tax breaks.  According to CTJ, these tax cuts would reduce federal revenue by about $1.2 trillion over the next 10 years.
The statement issued today by CTJ’s Director, Bob McIntyre, notes that although the President has said his plan would be tax neutral, his proposals to date for closing or reducing business tax loopholes “would only raise about $0.3 trillion from closing or reducing business tax loopholes.”  McIntyre added that the Obama framework provides little guidance on where he would find the other $0.9 trillion to offset the proposed corporate tax reductions.

McIntyre also faulted the framework for failing to strive to curb corporate tax breaks in a way that would more than offset the proposed cuts:  “We can and should collect more tax revenue from corporations. Right now, America’s biggest and most profitable corporations are paying, on average, a ridiculously low amount in federal income taxes, and many of them are paying nothing at all,” McIntyre said.  

He added:  “It’s very disappointing that the President has proposed what is at best ‘revenue-neutral’ corporate tax reform.  In 1986, President Reagan and Congress passed a tax reform act that increased corporate tax payments by more than a third.”

CTJ has published a fact sheet explaining why corporate tax reform should be revenue-positive, as well as a fact sheet explaining how the international corporate tax rules should be reformed.
We’ll follow up as additional information about the President’s plan becomes available. 

Jon Peacock
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