Stay tuned at 11:30 this morning, when Treasury Secretary Timothy Geithner will unveil a new corporate tax proposal that aims to lower the top income-tax rate for corporations to 28% (from 35%) while still generating more tax revenue by closing loopholes and deductions.
Mike Allen of Politico reported in this morning’s Playbook that the administration is pitching this as a win-win for businesses and the government, with officials saying it will simplify what is currently an unnecessarily complicated tax code, eliminate many of the tax benefits for special interests, and significantly reduce the top rate corporations pay.
According to published reports, the overhaul will:
1. Eliminate tax loopholes and corporate subsidies, such as those currently enjoyed by oil and gas companies, while lowering the top rate to 28%;
2. Enact a minimum tax rate for U.S. companies on foreign earnings;
3. Reduce the effective rate for manufacturers to a maximum of 25%; and
4. Simplify tax filings for small businesses.
Those reports also state the overhaul would not add to the deficit and would create more aggregate tax revenue by closing tens of billions of dollars in loopholes.
The timing on this announcement is very interesting: it comes on the morning of a crucially important GOP presidential debate in Arizona, the site of one of next week’s primaries. Again, stay tuned.