February 22, 2012
- The president’s policies—including the constant threat of historic tax increases on America’s families and small business owners—have failed and made the economy worse.
- Because his policies have failed, the president cannot stand on his record and he has regrettably turned to the politics of envy and division. Fairness is not found in taxing some people more but in subsidizing them less.
- House Republicans have a Plan for America’s Job Creators and have passed a budget that reduces tax rates for everyone without new job killing tax increases—it’s time for the president and Democrats in the Senate to stop blocking our bipartisan jobs bills.
The President’s Plan is Short on Details, Big on Potential Tax Increases:
- Today, President Obama released a vague new “framework” for business tax reform that would lower the statutory corporate tax rate to 28 percent while drastically increasing other taxes on certain sectors to at least offset (and perhaps exceed) lost revenue from the reduce rates.
- While the Obama Administrator’s acknowledgement that U.S. corporate tax rates are too high and that reform should be based on broadening the tax base are good first steps, the president’s framework lacks details, is out of step with his actual budget request, and does nothing to address individual tax reform.
- Much like President Obama’s budget do-over from last year, this tax plan is long on rhetoric and talking points, but short on details.
- The president’s plan would lower the corporate tax rate from 35 percent to 28 percent, which would still leave the U.S. with one of the highest corporate tax rates in the world.
- The president makes it clear that his plan would increase taxes by at least $1 for every $1 in tax cuts and the framework may even contain a net tax increase at the worst possible time.
- As pointed out by the National Federation of Independent Business, the president’s tax reform plan ignores small business owners who file as individuals and may actually increase their taxes.
- President Obama thinks it’s better for Washington to use the tax code to pick winners and losers instead of working toward making our tax system the simplest, fairest, and most competitive in the world.
- While the president’s plan is being billed by the White House as a tax cut for businesses, the proposal would cut taxes for some, but levy huge new tax increases on other American job creators.
- While all of the specifics are not yet available, the president’s tax framework hints at new tax increases:
- “Fiscal responsibility also requires that revenue be increased as part of a balanced approach that asks the wealthiest to contribute more.”
- “The Framework would repeal tax preferences available for fossil fuels.”
- “The business sector must also be asked to contribute to restoring fiscal sustainability.”“Under the president’s proposal, income earned by subsidiaries of U.S. corporations operating abroad must be subject to a minimum rate of tax.”
- “Under the president’s proposal, income earned by subsidiaries of U.S. corporations operating abroad must be subject to a minimum rate of tax.”
- The president’s plan proposes a new global minimum tax, which is the exact opposite of territorial tax reform and would provide an incentive for companies to permanently relocate overseas.
- The president’s plan would take a temporary tax credit for green energy and make it permanent and refundable—that’s the direct opposite of closing loopholes and simplifying the tax code.
- Until the president puts forth a real proposal that can be scored by the Congressional Budget Office, he’s offering little more than a media messaging pamphlet.
The President’s Real Budget Proposal Continues Tax Policies That Have Made Our Economy Worse:
- While this new proposal is unclear on details about President Obama’s new tax increases, the president recently released his actual FY 2013 budget request, which did not lower the corporate tax rate and contained more of the same failed tax policies that caused the worst jobs crisis since the Great Depression.
- The president’s real budget contains the largest tax increase in U.S. history, which would further hamstring our economic recovery by imposing $1.9 trillion in tax increases on American families and job creators at the worst possible time.
- In fact, each of the president’s four budgets has included the largest tax increases in U.S. history.
- Tax increases in the president’s budget include:
- $1.4 trillion in income tax increases on families and business owners earning $250,000 (couples) or $200,000 (individuals).
- $143 billion by increasing the death tax.
- $41 billion in tax increases on energy producers.
- More than $300 billion in additional tax increases.
- Even while the president talks about cutting loopholes, his own budget fails to reform or eliminate tax subsidies and special preferences for the president’s allies, like those that were given to Solyndra.
- The impact of the president’s real and constant threat of tax increases is clear: unemployment has been above 8 percent for 36 months, the longest such streak since the Great Depression.
House Republicans Have A Real Plan to Lower Corporate Tax Rates:
- After so many disappointing decisions by this administration, any step in the right direction is welcome news for Americans still suffering through the Obama economy. Reducing our corporate tax rate—currently the second-highest in the industrialized world—is essential to creating jobs. But this proposal could very well be a net tax increase on American job creators.
- House Republicans believe America deserves a tax code that is fairer, flatter, simpler and will allow our companies to compete with the rest of the world. And we acted on those principles by offering real tax reform in our budget, which Democrats rejected.
- House Republicans have been the only thing standing in the way of the largest tax increase in history that President Obama has repeatedly called for.
- House Republicans have passed a budget that would provide common sense, deficit neutral tax reform that will make the tax code simpler, flatter, fairer, globally competitive and less burdensome for American families and businesses.
- House Republicans passed a budget that would end loopholes and complicated deductions and use the revenue for a deficit-neutral overhaul of the tax code that will broaden the tax base and create jobs.
- House Republicans have passed a budget including across-the-board reductions for both businesses and individuals that would remove tax carve outs and loopholes to ensure that no business or individual would face a tax rate above 25 percent.
For additional information, contact:
The House Republican Conference Policy Office