During his visit to Amazon.com’s distribution center in Chattanooga, Tennessee this week, President Barack Obama proposed plans for a deal that cuts corporate tax rates and directs funds to initiatives that create more middle class jobs. The president’s “grand bargain” with the GOP would also provide tax incentives for manufacturers that reshore jobs to the U.S., which will help bolster the economy.
The plan involves revenue–neutral simplification for the business tax code, which will eliminate loopholes that encourage businesses to direct jobs overseas, while lowering the rate from 35 percent to no higher than 28 percent. Additionally, the plan calls for a manufacturing tax rate capped at 25 percent, The White House announced.
“I am willing to work with Republicans on reforming our corporate tax code, as long as we use the money from transitioning to a simpler tax system for a significant investment in creating middle-class jobs. That’s the deal,” Obama said.
The president’s visit to Amazon.com, which recently announced that it will add 7,000 new jobs, was one of several of a summer campaign intended to lay out the administration’s economic plans.
Part of the plan involves building the country’s workforce: “We can build a broader network of high-tech manufacturing hubs that leaders from both parties can support. We can help our community colleges arm our workers with the skills that a global economy demands. All these things would benefit the middle class right now and benefit our economy in the years to come,” the president announced.
The proposal also involves infrastructure investments to modernize the nation’s highways, bridges, transit systems, and airports.
Less than 24 hours after the speech, the plans for the deal met political opposition. Although both parties have supported an overhaul, they have yet to agree on the specific revisions, as some fear backlash from businesses that pay through individual codes, therefore making them exempt from reductions. Senate Minority leader Mitch McConnell was among several politicians who criticized the proposed deal. “It’s just a further-left version of a widely panned plan he already proposed two years ago, this time with extra goodies for tax-and-spend liberals,” Voice of America reported.
A statement issued by Michael Steel, spokesman for the office of House Speaker John Boehner, reflected a similar tone: “This proposal allows President Obama to support President Obama’s position on taxes and President Obama’s position on spending, while leaving small businesses and American families behind.”
How do you feel about the president’s ‘Grand Bargain’ deal? Is it good or bad for business?