Friday, December 15, 2017
Editorials

Obama's plan a good start on corporate tax fairness

If only cleaning up the loophole-choked corporate tax code were as easy as presenting a sensible framework for reform. President Barack Obama's proposal to lower the corporate tax rate from 35 percent to 28 percent while closing exemptions and ending subsidies is a reasonable approach to tax reform. But in this election year it is unlikely that anything the president proposes will get serious consideration by the Republican-led House, and the Republican candidates for president are determined to make deeper tax cuts a campaign issue.

The business community has long grumbled that the United States has one of the highest rates of corporate taxes in the world. But due to the tax code's complexity, and the alacrity with which corporations navigate its loopholes, not many businesses pay the full freight. The average tax rate actually paid by domestic corporations is 26 percent as of 2008. And many large companies earn millions in annual profits without paying any corporate tax at all. The thrust of Obama's tax reform would level the playing field and make it less likely that companies with the smartest lawyers and best accountants pay the lowest tax bill.

Some of the loopholes and subsidies Obama intends to close are familiar and should have been eliminated long ago. For instance, he would end subsidies for corporate jets and oil and gas companies, and he would eliminate the special tax status for "carried interest" that protects partners in private equity firms from paying more than a 15 percent tax rate on their income.

Obama also calls for closing the loophole that allows large businesses to organize as a partnership to avoid paying any corporate income taxes. Partnerships were designed for small businesses, but huge firms have taken advantage of them for tax purposes, including the mutual fund giant Fidelity. Another welcome adjustment would charge U.S. companies with foreign earnings a minimum corporate tax. Right now companies with overseas profits play games to avoid taxes that deny America domestic investment.

Most significantly, Obama's plan is revenue neutral. It would bring in the same revenues by lowering the corporate tax rate but requiring more businesses to pay their fair share. Compare that to the Republican presidential front-runners who propose cutting corporate taxes even deeper without replacing the revenue. Mitt Romney wants to cut the corporate tax rate to 25 percent and calls for some "broadening" of the tax base but with no specifics. (In an old supply-side trope, Romney claims growth will make up any losses.) Rick Santorum would simply slash the corporate tax rate in half to 17.5 percent. America has a revenue problem, and the leading Republican contenders for president who complain about the federal deficit would reduce revenue even further.

Getting serious tax reform through a divided Congress in an election year is wishful thinking. But Obama would make the tax code significantly fairer. The president will have to draw that distinction as the campaign unfolds and explain to voters that the real issue is not just which candidate proposes the lowest tax rate.

Comments
Editorial: Rubio should make good his threat to oppose tax cuts without changes

Editorial: Rubio should make good his threat to oppose tax cuts without changes

For once, it would be nice to see Sen. Marco Rubio stand up as the independent leader he aspires to become. For once, the Florida Republican should hold his position rather than bow to pragmatic politics. Rubio can stick with his threat Thursday to v...
Published: 12/14/17

Another voice: A shameful anniversary

Josephine "Joey" Gay should have celebrated her 12th birthday this week. She should have been surrounded by friends and family in a place festooned with purple, her favorite color.Chase Kowalski should have been working toward a Boy Scout merit badge...
Published: 12/13/17
Updated: 12/14/17
Editorial: Congress should block efforts to expand offshore drilling

Editorial: Congress should block efforts to expand offshore drilling

Timing is everything, and Sen. Bill Nelson seized the right moment this week to call on his colleagues to pass legislation he filed earlier this year that would block the Trump administration from opening additional areas to offshore drilling. With t...
Published: 12/13/17

Another voice: Alabama picks an honorable man

THANK YOU, Alabama.In Tuesday’s special election, the state by a narrow margin chose to spare the nation the indignity of seating an accused child molester in the U.S. Senate. Though the stain of electing Republican Roy Moore would have sullied Alaba...
Published: 12/12/17
Updated: 12/13/17
Editorial: Tax cuts aren’t worth harm to Tampa Bay

Editorial: Tax cuts aren’t worth harm to Tampa Bay

As congressional negotiators hammer out the details on an enormous, unnecessary tax cut, the potential negative impact on Tampa Bay and Florida is becoming clearer. The harmful consequences stretch far beyond adding more than $1.4 trillion to the fed...
Published: 12/12/17

Another voice: Privacy in the internet age

How much information about you is on your cellphone? Likely the most intimate details of your life: photographs, internet searches, text and email conversations with friends and colleagues. And though you might not know it, your phone is constantly c...
Published: 12/10/17
Updated: 12/11/17
Editorial: Grand jury could force reforms of juvenile justice system

Editorial: Grand jury could force reforms of juvenile justice system

Confronted with documentation of sanctioned brutality and sexual abuse in Florida’s juvenile detention centers, the reaction from Gov. Rick Scott’s administration was defensive and obtuse. So it’s welcome news that Miami-Dade State Attorney Katherine...
Published: 12/08/17
Updated: 12/11/17

Editorial: U.S. House sides with NRA over state’s rights on concealed weapons permits

With the horror of the mass shootings at a Las Vegas country music concert and a small Texas church still fresh, the U.S. House finally has taken action on guns. But the bill it passed last week won’t make Americans safer from gun violence. It is an ...
Published: 12/07/17
Editorial: Hillsborough cannot afford pay raises for teachers

Editorial: Hillsborough cannot afford pay raises for teachers

There is no satisfaction for anyone in the standoff over pay raises between the Hillsborough County School District and its teachers. Most teachers across the nation already are underpaid, but this district simply cannot afford the raises teachers ex...
Published: 12/07/17
Editorial: Impact of Water Street project extends beyond buildings

Editorial: Impact of Water Street project extends beyond buildings

With a buildout of $3 billion encompassing entire city blocks, it’s obvious that Jeff Vinik’s plans will change the look and feel of downtown Tampa. But the Tampa Bay Lightning owner unveiled a broader vision last week that reflects how far the impac...
Published: 12/06/17
Updated: 12/08/17