Corporate Tax

WASHINGTON - Amid the wrangling over the so-called fiscal cliff, President Obama and congressional Republicans can agree on something: They want to lower the corporate tax rate. The U.S. has the highest overall rate of any of the world's developed economies. It took the top spot in March after Japan reduced its rate, mimicking other countries that have lowered taxes to lure new businesses and keep existing companies from leaving. Negotiations to avert automatic income tax increases and federal spending cuts scheduled to kick in Jan. 1 could provide the impetus for U.S. policymakers to tackle an overhaul of the corporate tax code next year.

WASHINGTON -- If the world's major economies had a competition like the NCAA basketball tournament, the U.S. would enter as the No. 1 seed -- but a leading business group said the nation's corporate tax policies would get it bounced in the first round. The Business Roundtable is using the start of March Madness this week to push Washington to reduce corporate tax rates. The group has created an interactive, 16-nation bracket to compare the countries' corporate tax policies. Despite being seeded No. 1 because of the size of its economy, the U.S. gets upset by No. 16 Norway.

President Obama wants to significantly lower the top corporate income tax rate to 28% as part of a broad overhaul that would raise an additional $250 billion from businesses over the next decade by eliminating many loopholes and other breaks, according to a senior administration official. Full details of the administration's long-awaited corporate tax reform plan will be released later Wednesday morning by Treasury Secretary Timothy F. Geithner, touching off an election year debate about how much corporations should pay in taxes.

WASHINGTON -- Economic times are tough, but more Americans -- nearly 9 in 10 -- say it is "not at all acceptable" for people to cheat on their income taxes, according to a 2012 survey by the Internal Revenue Service. The 87% figure was up 3 percentage points from the 2011 Taxpayer Attitude Survey, conducted by the IRS Oversight Board, an independent panel that tries to help the agency better serve the public. Just 11% of respondents said it was acceptable to cheat on their income taxes, either "a little here and there" or "as much as possible.

President Obama's proposal to lower the corporate tax rate to 28% from 35% shows a growing consensus in Washington that many companies need to pay less in taxes for the U.S. to stay competitive globally. But exactly how to do that - and which companies should pay more to make up the difference - remains elusive in a volatile election year. Democrats and Republicans have starkly different ideas about how far to lower corporate tax rates and whether changes to individual tax rates, including the Bush-era cuts that expire at the end of the year, should be part of the reform debate.

In 1984, President Reagan's 1981 tax cuts resulted in corporations paying the lowest average tax rates in 50 years--22%, compared to 34% in 1981, 43.8% in 1980 and 40% in the 1960s and 1970s, the Congressional Budget Office said. The report called the corporate tax system "seriously deficient" in the goals of raising revenue simply, fairly and efficiently.

U.S. corporations have enjoyed a two-year bull run on Wall Street. They are sitting on a record amount of cash and are back to paying bonuses that are the envy of executives around the world. And the icing on the cake for many of them might be just around the corner: a tax cut that has bipartisan support in Congress. As part of their budget plan passed last week, House Republicans want to cut the corporate tax rate to 25% from 35%. The Obama administration and many Democrats also are looking to slice the current rate, but not as much.

A fuse was lighted under the old tax reform bonfire last week when the Government Accounting Office reported that 60% of U.S. corporations didn't pay a penny in taxes on their income from 1996 to 2000. That wasn't exactly a bolt out of the blue for most Americans. Maybe it was a surprise to some that the corporations didn't commit any crimes, but just engaged in some complicated and counterproductive -- to the Treasury, at least -- sheltering transactions.

The House passed the most sweeping rewrite of corporate tax law in nearly two decades, a measure designed to end a nasty trade war with Europe and shower nearly $140 billion in new tax breaks on businesses, farmers and other groups. The measure was approved on a 280-141 vote, sending it to the Senate, where it was expected to be approved today.

The U.S. Supreme Court on Tuesday struck down a California corporate tax law dating to 1936, declaring that the rule imposed unfair levies on companies headquartered in other states. California officials estimate that the ruling will force the state to pay as much as $95 million overall in refunds for past years. They said the high court's decision also will reduce future corporate income tax revenue by $13 million to $15 million annually.

WASHINGTON - Republican senators hit Treasury secretary nominee Jacob J. Lew with tough questions about his tenure as a top executive at Citigroup Inc. in the years leading up to the financial crisis, but the former White House chief of staff appeared to avoid any major controversy that could derail his confirmation. "Frankly, I think you've done really well," Sen. Orrin Hatch (R-Utah), one of the most aggressive questioners, told Lew at the end of his three-hour confirmation hearing Wednesday.

ASHEVILLE, N.C. -- President Obama on Wednesday called on Congress to help create "global centers" of high-tech jobs across the nation as part of a larger economic plan he says will spur American manufacturing and expand the middle class. After touring the Linamar auto parts factory here, Obama told a crowd of workers and customers that the Canadian company's decision to open the facility is part of a migration of jobs to the U.S. that the federal government should try to support.

Texas Gov. Rick Perry is on a hunting trip in California. And the prey is Golden State businesses - and jobs. Perry kicked off his in-your-face campaign to woo companies to the Lone Star State this month with radio ads declaring that "building a business in California is next to impossible. " Now the governor is on a whirlwind trip through the state courting companies in person. "You fish where the fish are," Perry said Tuesday during an interview in Beverly Hills, his slow drawl emphasizing each point.

WASHINGTON - House Republicans approved a temporary suspension of the $16.4-trillion ceiling on the nation's debt Wednesday, allowing the federal government to continue borrowing through spring while Washington shifts to more ambitious budget battles. Speaker John A. Boehner (R-Ohio) convinced his rebellious majority to go along with the new strategy by promising them the opportunity in the months ahead to extract deep spending cuts to Medicare and other domestic programs. The approach was a seismic political shift for Republicans who in the past had pressed for simultaneous cuts, which House Democrats dismissed as “irresponsible” and a “gimmick.” The vote was 285-144, and despite the robust support it would not have passed without Democrats -- 33 Republicans opposed it. QUIZ: Test your knowledge about the debt limit “We know with certainty that a debt crisis is coming to America,” said Rep. Paul D. Ryan (R-Wis.)

WASHINGTON - Despite the huge relief rally on Wall Street, the incomplete resolution of the so-called fiscal cliff will do little to boost the economy but assures an intense budget battle that is expected to weigh on spending and hiring at least over the next few months. The New Year's Day deal let payroll taxes for all workers revert to their previous higher rate, though it avoided the worst of the "fiscal cliff" issues by blocking tax-rate increases on all but the wealthiest Americans and postponing federal spending cuts.

Middle-class taxpayers aren't the only ones who stand to benefit from the last-ditch deal to avert the so-called fiscal cliff. The agreement in Congress also includes something for Hollywood -- the extension of a tax break for movies and TV shows that shoot mainly in the U.S. The provision, Section 181 of the federal tax code, allows qualifying productions to write down the first $15 million of expenses from their corporate tax bill.  ...

For citizens hoping for serious tax policy and budget debates, this has been a dispiriting election cycle. One party urges tax rates too low to support any plausible platform from which government can deliver the services we all expect. Those are the Democrats. The other party inhabits a realm of fantasy akin to Erewhon, the fictional land created by the 19th century satirist Samuel Butler. In Erewhon, Butler wrote, "If a man has made a fortune … they exempt him from all taxation, considering him as a work of art, and too precious to be meddled with; they say, 'How very much he must have done for society before society could have been prevailed upon to give him so much money.'" INTERACTIVE: Outside spending shapes 2012 election It is a pity that Republicans do not appreciate that Butler was writing ironically.

President Obama roiled the business community Monday by proposing to hike taxes on income generated outside the United States. The changes, which supposedly would close loopholes and remove incentives to export jobs and investment, would bring an estimated $210 billion to the Treasury over the next decade. We're all for closing loopholes and ending tax shelters that enable the wealthy to hide income.

Re “ Corporate tax rate may be lowered ,” Business, Dec. 25 Republicans have agreed that loopholes should be closed for corporations. The most egregious loophole may be the one that in effect gives interest-free loans to U.S. corporations to invest overseas. I am referring to the loophole whereby they are excused from paying taxes until the money earned is “repatriated.” If the president is willing to lower the rate to competitive levels, he should insist on changes to this tax break.

WASHINGTON - Amid the wrangling over the so-called fiscal cliff, President Obama and congressional Republicans can agree on something: They want to lower the corporate tax rate. The U.S. has the highest overall rate of any of the world's developed economies. It took the top spot in March after Japan reduced its rate, mimicking other countries that have lowered taxes to lure new businesses and keep existing companies from leaving. Negotiations to avert automatic income tax increases and federal spending cuts scheduled to kick in Jan. 1 could provide the impetus for U.S. policymakers to tackle an overhaul of the corporate tax code next year.