In his State of The Union Speech, President Obama surprisingly called for a reduction of corporate tax rates. Such a reduction would be a much needed reform, and including it in the big speech is a clear indication that the president has turned to the center in anticipation of a difficult re-election race in 2012. However, whatever his purposes may be, the change in tax policy would help America, and we can only say, It is about time.
Conservatives have been pointing to the high corporate rate for decades as harmful to America's economy. But, all we have heard from the Left is their attack on "big business" for having cruelly exported jobs to third world countries and thereby creating massive unemployment in the American industrial heartland--Thus, the Left criticizes big business for moving operations overseas, without seeing that it is America's high tax laws that drive the companies out. As usual, the problem is the government, and the flight of industry is largely caused by bad tax policy, and yet they blame the companies for reacting in a totally logical and sensible way to those policies.
The same "blame big business" approach was re-affirmed yesterday by the President in his related remarks about having to close loopholes in order to pay for the corporate tax cuts. He explained the need to close those loopholes by stating: "Over the years, a parade of lobbyists has rigged the tax code to benefit particular companies and industries."
Now, we all know that lobbyists do not pass laws or change IRS regulations--such actions can only be taken by Congress. All the loopholes, which are just one of the many horrors of our Tax Code, are the work solely of Congress. Lobbyists may seek benefits, and we know they have to maintain continual lobbying efforts just to minimize destructive new taxes and regulations that would impair their ability to do business, but they can only ask--the politicians do the rest. Both the flight of industry overseas and the loopholes are caused by the actions of our elected government officials. It thus becomes clear, but not surprising, that the president is blaming others for his own harmful policy.