“The whole concept of corporate tax reform,” President Obama said on announcing his new plan to accomplish the task, “is to simplify, eliminate loopholes, [to] treat everybody fairly.” It is a theme he has repeatedly emphasized: making the tax code more equitable so that everyone pays their fair share. But like most of the president’s initiatives, the rhetoric does not reflect the reality.
Far from making the corporate tax system “fair,” the president’s corporate tax plan punishes smaller businesses, worsens the punitive double taxation of American companies that operate overseas, and, at a timewhen gas prices are spiking, selectively hikes taxes on American oil producers.
Fairness in the market means companies compete on a level playing field, and no one receives special treatment. The president’s idea of fairness is just the opposite, relying on market manipulation and picking winners and losers. His budget and corporate tax reform plan are chock-full of examples of special treatment, subsidies, and regulatory manipulations designed to determine outcomes. President Obama believes he can control markets by taxing Americans and deciding for himself how to allocate revenue, rather than letting us decide what to do with our own money in the free market.
Far from being “fair”, the president’s plan discriminates against family-owned smaller businesses by only reducing the tax rate for big corporate employers. For the 30 million sole proprietorships, partnerships, LLCs, and S-corporations that face taxation at the individual rates, their tax rate goes up from 35 percent today all the way to over 40 percent next year. For a president who claims to look out for the little guy in the face of predatory corporate greed, this tipping of the scales in favor of big business contradicts his rhetoric.
Further, with prices at the pump soaring and consumers and businesses across the nation feeling the squeeze, the President’s corporate tax plan will push gas prices even higher. What Democrats refer to as “special tax breaks for Big Oil” are, in reality, deductions that are available for all companies engaged in manufacturing or production activities. The president’s plan would eliminate this tax deduction for oil companies but leave it untouched for everyone else; a classic case of picking winners and losers.
Moreover, the revenues gained by eliminating these deductions are completely lost on a plan that showers new carve-outs for so-called “green energy” producers in yet another attempt to artificially boost consumption of products and technologies that no one seems to want.
Elected in 2010 as Utah's 16th Senator, Mike Lee has spent his career fighting to defend Americans’ basic liberties and to restore constitutionally limited government.
Lee graduated from Brigham Young University with a Bachelor of Science in Political Science. He graduated from BYU's Law School and went on to serve as law clerk at the U.S. District Court for the District of Utah, and then with future Supreme Court Justice Judge Samuel A. Alito, Jr. on the U.S. Court of Appeals for the Third Circuit Court.
Lee is a member of the Judiciary Committee, and serves as ranking Member of the Antitrust, Competition Policy and Consumer Rights Subcommittee protecting business competition and personal freedom.