New Proposal? Old Offers? New Tax Proposal on the Table
In late July, President Obama put fresh energy into the upcoming legislative battle over corporate tax reform and the need for increased spending on new jobs and national infrastructure. While pushing the debate forward, these proposals offer a mixed bag — and highlight the need for a simpler, more comprehensive stand on taxes by both parties.
We serve both corporate and small business clients. For corporate clientele, a cut in the corporate tax rate is a needed boon. For small businesses, the proposal does not offer much, and smaller business owners fear that all the benefits from the proposalwill end up as largesse for larger companies.
Among other points, aspects of the most recent White House tax proposal include:
*Reduction of the corporate tax rate to 28 percent for corporations and 25 percent for manufacturers
*Simplify the tax code without adding to the deficit
*Monies raised from the one-time transition to a new tax system will fund programs to create middle-class jobs
*Increase minimum wage
*Eliminate loopholes and incentives for sending jobs overseas
*Increase investment incentives for small business owners
*Fund community colleges to train workers
*Fund 45 Manufacturing Innovation Institutes over a period of ten years
President Obama noted in his speech at an Amazon warehouse location in Tennessee, “[b]ut if we’re going to give businesses a better deal, then we’re also going to have to give workers a better deal, too.”
The question is: how do partisan interests work together to achieve needed tax code simplification and stimulate long-term job creation? The coming months will tell.