Timothy Geithner, the Treasury Secretary, has presented Obama’s current plan for overhauling business taxes today. This plan includes eliminating loopholes and a reduction in tax rates by up to 28%. Critics, however, state this is not low enough.
Plans are also in the works to instate a minimum tax on foreign earnings, but no details have yet been given.
Geithner went on to say that the main goal of the Obama tax reform plan is to “restore a system” which allows American businesses to succeed or fail based on the services they provide or products they make, not on the acrobatics their tax professionals are capable of or the lobbyists they have in their corner.
He went on to explain that the proposed overhaul will be “politically contentious”, but analysts have stated that it will most likely not be instated for 2012 taxes.
Senior policy analysts Curtis Dubay has said that there is very little chance that the plan will be approved this year – partly because it is an election year, but also because he believes it will be seen as a policy that will “make things worse.”
William Gale has said that today’s plan simply shows how hard it can be to implement major tax reforms and legislation. He reminds us that taxes for business income in the U.S. are quite “confusing and uneven.”
Some of the difficulties are income which is taxed twice, moving beyond subsidies, deductions for interest, business partnerships, and more.
Geithner claims to have spoken with Senator Max Baucus, Senator Orrin Hatch, and Republican Sander Levin, and says they will meet sometime next week to iron out the proposal and build consensus.