The Obama administration has released preliminary details of a proposed overhaul of corporate taxes that would lower the tax rate for companies from the present 35 percent to 28 percent, and down to 25 percent for US manufacturers. Administration officials say that the revenue lost as a result of the cut would be recouped by eliminating dozens of loopholes utilized by corporations to lower their rates and avoid paying taxes.
In fact, the administration’s proposal to slash corporate taxes is a major step toward the forging of a bipartisan agreement after the November elections, whichever party wins the presidency, to shift the tax burden even further from the corporate elite to the general population.
Announcing the plan on Wednesday, Treasury Secretary Timothy Geithner said that the US corporate tax rate “is now on pace to become the highest among all developed economies.” In reality, the current 35 percent rate exists only on paper. According to data from the Organization for Economic Cooperation and Development (OECD), US corporations actually pay about half the tax rate of companies in other major economies.