Obama Calls for Tax Overhaul
July 31, 2013 Taxation in USA
WASHINGTON D.C. – Barack Obama is pushing for a complete tax overhaul in the USA, with cuts to corporate tax rates, alongside the implementation of new measures to fight tax evasion.
In a speech given on July 30th Barack Obama proposed an extensive overhaul of the national tax code as part of a “grand bargain” to “…rebuild an economy where everyone who works hard can get ahead.”
The President called for the corporate tax rate in the USA to be lowered from 35 percent to 28 percent, with a preferential rate of 25 percent for the manufacturing sector.
While the cuts are expected to decrease collection of corporate taxes, the Obama administration expects that overall tax revenues in the USA will increase following a revamp and simplification of the entire tax code, including personal income taxes, consumption taxes, and capital gains tax.
As part of the tax changes, a tax on offshore profits would be introduced on corporate earnings in order to prevent excessive tax avoidance and profit shifting by multinational businesses operating from the USA.
Barack Obama said that the cumulative increase in tax revenues will be used to fund new education programs, further improvements to public infrastructure, and greater support to innovative projects in the manufacturing sector.
The President explained that most of the measures would benefit the middle class, adding that “…for much of the past two years, Washington has taken its eye off the ball when it comes to the middle class.”
Barack Obama hopes that all of the proposed changes will be supported by both the Democratic and Republican parties, as he is “…offering something that serious people in both parties should be able to support: a deal that simplifies the tax code for our businesses and creates good jobs with good wages for the middle-class folks who work at those businesses.”
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