Obama Administration Plans to Cut Corporate Taxes in Year of Record Profits

Friday, May 6, 2011

At a time when almost every state is experiencing some kind of budget crisis, resulting in lay-offs of teachers, police, fire-fighters, and reductions to student programs and services to the elderly and the disabled, Treasury Secretary Tim Geithner is preparing to unveil the Obama administration’s plan to lower the top corporate tax rate from the current 35 percent to as low as 26 percent.

Politico reports that Geithner has already begun meeting privately with CEOs, academics, labor unions, and liberal and conservative think tanks, and his aides say he is “encouraged by the response.”

Part of that optimism stems from the fact that Democrats and Republicans alike are allies of the business world.

One top business lobbyist, speaking on condition of anonymity, said corporate tax reform should be “the easiest piece” of a complex fiscal bargain “because you have people in both parties in the business community.”

The number of people who filed new applications for jobless benefits leaped 43,000 last week to 474,000, the highest level in almost nine months.

The surge in unemployment comes at a time when U.S. corporations are more profitable than ever. According to data from the Federal Bureau of Economic Analysis, corporations reported an annualized profit of $1.68 trillion in the fourth quarter of 2010.

In the first quarter of 2011, Exxon-Mobil, the world’s biggest and most profitable corporation, raked in $10.7 billion. That’s a 69 percent increase over the same quarter last year, and the highest quarterly profit since 2008. This comes at a time when Americans are searching underneath the couch cushions to scrape together enough change in order to fill their gas tanks so they can go file for unemployment benefits.

Exxon-Mobil uses offshore subsidiaries in the Caribbean to avoid paying taxes in the U.S. and paid zero U.S. income tax in 2009, while enjoying billions in American taxpayer-funded subsidies. Exxon-Mobil’s CEO enjoyed a compensation package of more than $29 million.

Meanwhile, as I reported yesterday, the Obama administration is preparing to announce plans to tax drivers based on miles driven. The draconian plan suggests that the vehicle miles traveled (VMT) tax would be tracked by installing electronic equipment on each car to determine how many miles were driven. Payment could take place electronically at filling stations.

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13 Responses to Obama Administration Plans to Cut Corporate Taxes in Year of Record Profits

  1. Sayingwhatneedsaying says:

    Yes, ASSHOLE… that will help with the deficit! I will work against your re-election next year, Bozo!

  2. Nigel Karsten says:

    As I see it, the central issue for your president stems from the fact his economic team is heavily weighted from former Goldman Sachs people.

    This includes Timothy Geithner.

  3. Robyn says:

    What an asshole. Corporations don’t pay their fair share of taxes as it is.

  4. The Real Adam says:

    Obama is a ham-fisted, potent tool for corporate America.

    Whether its Big Oil, the insurance industry, Big Pharma or Wall Street. Obama doesn’t get up each morning and asks himself, “how can I make the lives of 308 million Americans better?” He asks Tim Geithner, “what can I do to shill for corporate America today?”

  5. Brigadoon says:

    Oh great. We’re $15 trillion in debt and Obama proposes a 9% reduction in corporate taxes. And who will make up this shortage to the US Treasury? Middle class taxpayers, that’s who. No wonder the number of IRS audits of earners making under $50,000 is up 11 percent. Please, someone explain to me how this is a good thing?

  6. Marcus Ybanez says:

    Why stop at a 9 percent reduction in corporate taxes?

    Just make it zero. Isn’t this the ultimate goal of the lobbyists who carry water for US corporations? Zero taxation. Just shift the entire burden of paying for the operation of the US to the American taxpayer.

    Obama needs to be watched closely. We must remember his so-called “Debt Reduction Commission” advocated eliminating the mortgage interest deduction for Americans. This is essentially the only meaningful deduction left for the middle class.

    If Obama is reelected, the issue is bound to come up sometime in his remaining four years in office. We can’t allow him to take this away from us.

  7. Debbie Banuelos says:

    Now that Obama gave the go-ahead order for the Navy SEAL team to capture and kill bin Laden, it looks like he thinks he can get away with anything.

    Including cutting the corporate tax rate by nearly 10% and the American people — relieved to not be afraid any more, will cheer this too. Happy to make up the shortage to the Treasury.

  8. Peace Nick says:

    This is so reminiscent of David Stockman. I’m sure St. Reagan is looking up from Hell smiling.

  9. chet says:

    I read this here, but have not seen it reported anywhere else. Can anyone provide confirmation that Obama is planning to cut the Corporate tax rate?

  10. chet says:

    I’ll believe it when I see it. It appears to be all under discussion at this point. From what I have read, this is a proposal which is supposed to be combined with a drastic cutting of corporate tax loopholes.

  11. Seabec says:

    Cutting taxes on big business is a central GOP mantra.

    Obama ran as a Democrat but governs like a Republican. Wonder the GOP backed off vouchers for Medicare. This is only the beginning. They have nothing to criticize this president about now. He’s doing their bidding for them from A to Z.

  12. Like Politico said: “This will be a feast for K Street.”

    I’m looking forward to reading the O-Bots try to defend this. I’m certain they will try but they will be shot down. At least by me.

    At a time when unemployment is 12% in many states and regions, the country is spending $8 billion a month on Iraq and Afghanistan, the national debt is increasing at a rate of $4.05 billion per day, and the national debt is more than $14 trillion dollars, there is no moral justification for cutting corporate taxes to as low as 26 percent.

    O-Bots, the floor is yours. 🙂

  13. DMason says:

    Either Barry’s been reading too many books about his hero, Ronald Reagan, or Ayn Rand. Either way, cutting the corporate tax rate when the size of the debt is equal to GDP means the American people should expect more and deeper cuts to the programs we need like Pell Grants, Social Security and Medicare.

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