Obama set to lower corporate rates; who else wants lower taxes?

Corporations and big businesses have continually ranted over what they claim are higher taxes in the U.S., despite the fact that many of them pay no taxes at all, and they may be getting their wish.

Two sources close to the administration have .. under condition of anonymity ... said that President Barack Obama will call for cutting the top 35 percent corporate tax rate as early as this month, and will propose a tax rate which is closer to the average of that seen in peer nations.

Such changes would be in line with remarks made last year by Treasury Secretary Timothy Geithner. At the time, Geithner suggested that the United States should move to a rate more in line with its major trading partners in the high 20-percent range.

Only Japan has a higher corporate tax rate than the United States among industrialized countries. However, what many forget is that other countries make up the lost revenue with a value-added tax or VAT. The United States does not have a VAT. In addition the loopholes that exist allow huge companies like Bank of America to go without paying any corporate income tax at all.

It has been suggested by some, somewhat in jest, that since "corporations are people," the tax code should be reformed and simplified and should not have a separate tax rate or rules for corporations, but instead subject them to the same rules as people. This of course, could not fly in a Congress where the House is controlled by the GOP, despite the fact that the GOP is the party that is convinced corporations are people, despite their lack of souls (corporations, not the GOP).

While one would expect that an overhaul of the corporate tax system, favorable or not to corporations, would be extremely unlikely in an election year, the president's plan could be considered a peace offering to the business community.

Despite lowering the corporate rate, it's unclear that Obama's proposal would not, in fact, increase tax revenue from companies. His tax measures were already outlined during his State of the Union address in January, and included such items as closing tax loopholes for companies that move facilities and jobs overseas. A senior administration official said the plan will lay out principles for revising corporate taxes by the end of February.

On Friday, the official said "We will talk more before the end of the month on what corporate tax reform would look like." He also confirmed that the plan would include a call for "lower rates."

Obama's new corporate plan will also include a new minimum tax on foreign profits earned in low tax countries, it was said. That is, however, an unpopular proposal among the corporate community.

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