Changes in store for the corporate tax rate
U.S. President Barack Obama speaks at a White House event February 21, 2012 in Washington, D.C. His administration is expected to lay out a plan today to reform the corporate tax structure in the U.S.
Jeremy Hobson: We're here in Michigan to get a sense of The Real Economy: what matters most to voters, ahead of next Tuesday's Michigan Primary. And one of the issues we talked about with the Governor yesterday -- corporate tax cuts -- is making big news nationally today.
The Obama administration is expected to announce a plan to cut the federal corporate tax from 35 percent -- that's the second highest rate in the world -- down to 28 percent. The plan calls for the elimination of corporate tax loopholes, which keep many big firms from paying the top rate.
Tax economist Richard Murphy says the change would bring in more revenue, not less.
Richard Murphy: It will make the relationship between U.S. corporations and the rest of the world so much easier, and we'll have a better overall corporate tax system as a result.
Analyst Juli Niemann of Smith, Moore and Company agrees that the elimination of loopholes should mean more revenue for the federal government overall.
Juli Niemann: There's so many loopholes and subsidies out there, corporations are not paying the real tax rate of 35 percent. By lowering it officially to 28 percent -- and 25 percent for manufacturing -- what you have is a straight, clean tax rate that will bring actual revenue into the government.
President Obama's republican rivals have also proposed cutting corporate taxes. The two GOP frontrunners -- Mitt Romney and Rick Santorum -- want them down to 25 percent and 17.5 percent, respectively.