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New plan to be outlined for U.S. corporate tax code
Each year, citizens and companies alike must file taxes with the federal government. Many big corporations have reduced their payments by finding loopholes in the tax code, but that could soon change.
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Adriene Hill: The Obama administration today will outline a broad overhaul of the nation's corporate tax code. The plan isn't expected to be approved during this election year, but it's got businesses taking note -- here and abroad.
Marketplace's Eve Troeh reports.
Eve Troeh: Today's announcement isn't unexpected. In the State of the Union address last month President Obama said he planned a corporate tax makeover. It wasn't just American companies who took note -- foreign leaders perked up.
Richard Murphy: Because the U.S. has really one of the strangest sets of corporate tax laws in the world.
Richard Murphy directs Tax Research U.K. He says the U.S. charges some of the highest corporate taxes in the world -- about 35 percent. Compare that to Ireland: it charges companies taxes nearer 10 percent.
But the American system lets companies avoid paying by taking advantage of tax shelters. Many U.S. companies park their profits overseas to avoid taxes. And it's not just U.S. taxes they're avoiding.
Murphy: Frankly we're seeing these companies not paying taxes in the countries around the world where they're generating their profits, because they can shift all their profits back to a tax haven like Bermuda, and the rest of the world is pretty fed up about that.
Fed up with the loopholes, and President Obama's plan is expected to close some of those. At the same time, he'd lower the corporate tax rate by a few percentage points. The combination of the two should bring in more money. Companies will pay a lower tax rate, but pay it on a bigger chunk of their profits.
I'm Eve Troeh for Marketplace.
The comparison between Irish and US corporate tax rates in this story introduces an unacceptable level of bias and constitutes, frankly, irresponsible and wildly incomplete reporting. Just how IS that Irish economy doing? Let's go back fewer than 90 days into Marketplace's own archives and review ample coverage of that country's $100+ BILLION dollar deficit and Euro-Bailout program.
Failing to provide any context to Ireland's corporate tax structure (high unemployment, widespread externalized costs across the Eurozone, suppressed performance in all the world markets) creates a false impression that it's low rate is somehow "good" and the relatively high US rate is "bad."
Eve Troeh glaringly missed an opportunity to challenge, expand upon, or or replace the commentary supplied by Richard Murphy. Radio may not provide time for expansive coverage, but this omission was, frankly, beyond the pale.
