James F. McDonough
Of Counsel
732-568-8360 jmcdonough@sh-law.comFirm Insights
Bipartisan move toward corporate tax reform
Author: James F. McDonough
Date: March 21, 2014
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There hasn’t been a major reform of corporate tax law in almost three decades, and with good reason – neither party agrees on which way to push the needle. However, recent developments in Washington suggest that both parties may be moving toward agreemen in some key areas, according to MSNBC. Both President Barack Obama and Michigan Rep. David Camp, Republican chairman of the House Ways and Means Committee, want to close some corporate tax loopholes.
The president and Camp also both want to use the money gained by closing these loopholes to lower the corporate tax rate, which is currently 35 percent of gross income, according to the news source. The president released his plan earlier this week, while Camp released his last week.
A senior Treasury Department official told reporters on the condition of anonymity that, while “obviously we don’t agree on everything,” the two plans are, “within shouting distance of each other,” according to The Cresent-News. White House budget director Sylvia Burwell also suggested that there were some similarities between the proposals.
Camp, however, does not agree that the proposals are all that similar, according to the news source.
“Our plan to close loopholes and lower rates for all Americans would add $3.4 trillion to the economy, create nearly 2 million jobs and put $1,300 more per year in the pockets of middle-class Americans,” he said in a statement. “Unfortunately, the president’s budget adds more complexity to the tax code and increases taxes for more Washington spending. That is the wrong direction.”
While a number of groups feel that lowering the corporate tax rate with the money gained from closing loopholes is out of line with liberal goals, others feel that in general, lowering the corporate tax rate in America will reduce incentives for multinational companies to offshore their profits.
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