Here are the details of Obama’s latest crony capitalist ploy. Yesterday, the President proposed reducing the corporate tax rate from 35 percent to 28 percent. That’s certainly a landmark moment – a liberal President calling for a lower corporate tax rate is a Nixon goes to China moment. It’s also long overdue, considering that the U.S. corporate tax rate is the second highest in the world, making it nearly impossible for American companies to compete in the global economy. But here’s where the trouble begins.
Under the President’s “framework,” he singles out specific industries he doesn’t like — oil and gas, insurance, and small aircraft manufacturers, for example — and proposes to close what he asserts are their loopholes, thereby raising their taxes. But with his other hand, he opens a trap door and waves his friends through, cutting their tax rates to 25 percent “and to an even lower rate for income from advanced manufacturing activities.”
The President’s best friends get access to second trap door leading to even lower rates.