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Blog

Obama to Eliminate Tax Breaks

05/05/2009

The president recently announced plans to crack down on what he calls "corporate tax abuses."  He is seeking another $200 billion out of companies over the next ten years that do business internationally.  Whether he calls it closing a loophole or a tax hike, it will have the same effect as raising taxes by $200 billion on American businesses.  That might cause the elimination of more jobs, drive companies to more tax-competitive countries, and slow business in the United States.  Government should not tax and spend more, especially in a recession.

Instead of forcing corporations to pay more taxes, the president should scrap our broken tax code.  Reducing the compliance costs of our burdensome system would likely bring government more than $200 billion that it hopes to take with the president's new plan.  81 million returns were filed last year with the help of an accountant.

Americans should be concerned about maintaining the United States as a tax-competitive country.  If taxes rise too much--and maybe they already have--then both domestic and foreign capital will move elsewhere for greater returns with lower tax burdens.  Congress and the president should consider the effects of raising taxes rather than just seeing a tax hike an opportunity to take more money from Americans.