The Obama administration has a new corporate tax plan that is sensible, supported by both parties and sure to fail. Welcome to election-year politics.
Today, Treasury Secretary Tim Geithner will outline a plan to reduce the corporate tax rate to 28 percent from 35 percent while increasing revenues by eliminating deductions and loopholes in the tax code. It's something the business community has long-clamored for as the U.S. is home to the one of the highest corporate tax rates in the world even though many companies circumvent it thanks to a byzantine system of loopholes.
Taking the talking points of Republicans and Democrats at face value, you'd think the legislative proposal would sail through Congress. "Republicans and Democrats have expressed broad support for a tax strategy that reduces rates across the board while eliminating special interest loopholes," reports The Washington Post. "Economists across the political spectrum generally agree that the U.S. corporate tax rate is too high and that it hurts American competitiveness." reports Politico. "Everyone agrees on the basic principle of lowering rates in exchange for eliminating loopholes," says Dean Baker, co-director of the Center for Economic and Policy Research.