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| Obama To Tax Corporations Until They Leave America | |
| 2009-02-26 | |
| President Barack Obama has proposed a dramatic tax increase on the foreign profits of U.S. multinationals, in a 10-year budget blueprint released Thursday. The tax increase on foreign income, taken together with proposals to crack down on offshore tax cheating, would swell federal coffers by an extra $25 billion a year in revenue by 2014, according to projections by White House budget officials. The budget plan would also impose a $31.5 billion tax increase, over a 10-year period, on oil companies, by repealing various tax breaks now enjoyed by the sector. In addition to that, Mr. Obama would reinstate Superfund taxes, raising $17.2 billion over 10 years, much of which is accounted for by excise taxes on oil. Those changes are part of a package that would raise taxes on business by $353.5 billion over the next 10 years, which could help fund other tax cuts or spending, or reduce the deficit. "The budget also begins to restore a basic sense of fairness to the tax code, eliminating incentives for companies that ship jobs overseas and giving a generous package of tax cuts to 95% of working families," Mr. Obama said in his budget message. Mr. Obama's plan would also raise close to $637 billion over 10 years by reversing the major tax cuts passed during the administration of George W. Bush for upper-income Americans. In keeping with campaign proposals, those tax increases would hit single taxpayers with income above $200,000 and married couples with combined income above $250,000. They would come in three areas -- raising the top two marginal tax rates from 33% and 35%, to 36% and 39.6%, respectively; reinstating limits on itemized deductions; and raising the tax rate on capital gains and dividends from 15% to 20%. The plan envisions letting those Bush tax cuts expire as scheduled at the end of 2010 for wealthy Americans, instead of implementing the tax increases this year or next. The plan is short on detail regarding how Mr. Obama would roll back tax benefits for U.S. multinational firms. It also lumps in international tax reforms with unspecified proposals to shut down offshore tax evasion, raising a total of $210 billion over the next 10 years. Marc Gerson, an attorney at Miller & Chevalier, said that taking away tax advantages now offered to U.S. multinational firms might harm those firms' ability to compete globally. "The current system allows them to effectively re-deploy foreign earnings, or competitively price contracts," he said. But Mr. Gerson added that the overall impact on U.S. businesses from the tax-increase proposal would depend on whether the revenue is used to lower the corporate tax rate, or to fund unrelated spending. "If you took that and significantly lowered the rate, that to me is a debate worth having," Mr. Gerson said. As expected, Mr. Obama proposed raising taxes on private-equity fund managers and venture capitalists, by taxing their profits as ordinary income instead of capital gains. That change would raise $23.9 billion over 10 years, according to White House budget office estimates.
In addition, the White House proposed to repeal accounting last-in, first-out accounting rules, at the expense of oil and gas but also some other industries, including auto dealers. That change is estimated to raise $61 billion over 10 years. The plan also proposes tax cuts for businesses, including a two-year expansion of a tax break for net operating losses that was dropped from economic-stimulus legislation at the last minute. That tax break, important to manufacturers, retailers and home builders, is estimated by the White House to deliver $63.5 billion in tax refunds to struggling companies in 2009-2010. It is a candidate for inclusion in tax legislation to move later this year. It also would make permanent the research-and-development tax credit and eliminate taxes on capital gains related to small business, both proposed by Mr. Obama during his campaign. For individuals, the plan would continue tax benefits for middle-class and lower-income individuals that were enacted for 2009 and 2010 by the stimulus legislation. Those tax cuts, including a worker-tax credit, expanded child-tax credit benefits for lower-income families and education-tax credits, would cost the government a total of $770 billion over 10 years. | |
| Posted by:Anonymoose |
| #4 raising the tax rate on capital gains and dividends from 15% to 20%. Well, that's not going to cost most of us anything for a while. Nor raise much revenue for the government. An extra 5% tax on nothing is still nothing. |
| Posted by: Glenmore 2009-02-26 23:24 |
| #3 Those greedy venture capitalists never produced anything of value (aside from Apple, Microsoft, Google, Yahoo, etc.). Let's put them out of business. |
| Posted by: DMFD 2009-02-26 22:05 |
| #2 WORLD AFFAIRS BOARD > GENERAL MOTOR'S PLAN [to POTUS Obama-USGovt/Congress]: SUBSIDIZE OUR 48-YEAR OLD RETIREES. |
| Posted by: JosephMendiola 2009-02-26 20:48 |
| #1 As expected, Mr. Obama proposed raising taxes on private-equity fund managers and venture capitalists, by taxing their profits as ordinary income instead of capital gains. Why not go after the trust fund and inheritance babies. They're not directly involved in wealth creation. Oh wait, that would include the Kennedy's and Kerry's. Never mind. |
| Posted by: Procopius2k 2009-02-26 20:33 |