In a strategy to help boost the economy and reduce unemployment, President Obama plans to introduce tax incentives to help keep jobs in the U.S. But these measures are only a band-aid over a bullet-wound.
According to a recent Reuters article by Caren Bohen and Kim Dixon, “President Barack Obama, under pressure in an election year to boost the economy and reduce high unemployment, will unveil tax proposals aimed at encouraging U.S. firms to keep jobs at home.”
Tax reform has long been a promise of the Obama administration, though the most significant tax legislation that he approved extended the Bush-era tax cuts. This caused general uproar amongst his base, and he responded by claiming that the GOP forced him to make that concession in exchange for an extension of unemployment benefits.
And now, in light of the approaching election, the President is trying to make things right with his progressive base. The White House said in a statement: “In the coming weeks, the President will put forward new tax proposals to reward companies that choose to invest or bring back jobs to the United States, and to eliminate tax advantages for companies moving jobs overseas.”
This is a smart move, as Bohen and Dixon report: “The emphasis on keeping U.S. jobs at home is in line with a populist economic message championed by Obama that could play well with unionized workers, whose support the Democratic President will need to win re-election in November.”
Bohen and Dixon further discussed Obama’s new plan, saying, “At the business forum, Obama will urge companies investing overseas ‘to take this opportunity to get the American people back to work… That’s how we’ll rebuild an economy where hard work pays off and responsibility is rewarded – and a nation where those values live on,’ Obama will say, according to an excerpt from his prepared remarks.”
Sure, Obama’s proposals will probably amend the broken system to a degree. But the fact of the matter is that any minor changes that he can make will only serve as a band-aid over a bullet-wound.
The GOP complains that the US has the highest corporate tax rate out of all modern nations, but the loopholes in the corporate tax code allows 69% of all corporation to pay NO FEDERAL INCOME TAX.
Minor reforms produce fleeting results, at best. What the US needs is massive tax overhaul. Whatever is decided, a bridge must get built between personal income tax and corporate income tax. If corporations are people (as Mitt Romney might claim), then why would they have a separate tax code? This overhaul could come in many different forms, including a flat tax rate for all types of exchange (visions of Herman Cain’s 9-9-9 come to mind). It could be a sloping tax, free of loopholes. It could even be an elimination of federal income tax completely (college students flaunting “Ron Paul 2012!”).
But none of these options will get seriously considered. That would mean that corporations would have to start paying their fair share. And the GOP, as well as a good portion of the Democratic Party, would never allow that to happen.