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President Barack Obama's tax proposal raises questions for Louisiana lawmakers
Source:
nola.com
- Feb 23, 2012
Published: Thursday, February 23, 2012, 7:40 AM
Updated: Thursday, February 23, 2012, 7:40 AM
By Bruce Alpert, The Times-Picayune
WASHINGTON -- Louisiana lawmakers are generally praising President Barack Obama for seeking lower corporate tax breaks, though most criticize his targeting of tax breaks for oil and gas companies to pay for the plan and contribute to deficit reduction.
The president's proposal, released Wednesday, calls for reducing the U.S. corporate tax rate from 35 percent, one of the world's highest, to 28 percent, but eliminating many of the loopholes that enable some companies to pay only a fraction of the 35 percent rate.
His plan targets oil and gas companies for higher taxes, along with firms that have substantial operations in other nations, while offering tax incentives for companies that do manufacturing work in the United States.
Sen. David Vitter, R-La., has said that he supports the idea of eliminating special tax breaks in return for a lower corporate tax rate. But he said there are still a lot of questions about the president's proposal -- specifically how it will affect individual tax rates.
"I'll be studying the details of this proposal," Vitter said. "We can't afford to have the second highest business (corporate) tax rate in the world. I'd like to get it down to 25 percent in exchange for getting rid of special interest tax breaks. I just hope Obama's proposal isn't tied to raising the top individual rate, his election year mantra."
Rep. Steve Scalise, R-Jefferson, said the Obama proposal targets oil and gas tax breaks and that's unfair to an industry so important to Louisiana. Raising taxes on the oil gas industry would only accomplish one thing, he said, "raise the already unacceptably high prices" of gas at the pump." And that, he said, would cost the struggling U.S. economy more jobs.
Sen. Mary Landrieu, D-La., said that elimination of special tax breaks shouldn't be targeted to a handful of industries.
"Sen. Landrieu shares the president's goal to simplify and clarify the corporate business tax code in order to make our business environment more competitive for large and small businesses and strengthen the country's economy," Landrieu spokesman Matthew Lehner said. "However, only targeting tax expenditures for specific industries are not the comprehensive approach that we need or one that Sen. Landrieu supports."
Rep. Cedric Richmond, D-New Orleans, applauded the president "for reviving the tax reform debate. Corporate tax reform is terribly important to maintaining the competitiveness of U.S. industry and spurring job creation. It is appropriate to assess the effectiveness of various tax expenditures, in order to help reduce our deficits. Lowering overall rates while ensuring everyone pays their fair share is essential. That being said, we must be careful to not single out particular industries for punitive tax treatment."
Richmond said any plan to deal with oil and gas company taxes should include a "fair and honest discussion about "expediting the receipt of royalties for Louisiana." He and other lawmakers are pushing for raising the cap on royalty revenue sharing with the states from $500 million a year to $750 million. The revenue sharing plan is scheduled to begin in 2017 and Richmond and Rep. Jeff Landry, R-New Iberia, recently won House enactment of a measure that would raise the cap to $750 million in 2023.
"We must preserve the tax incentives that have been proven to drive job creation," Richmond said. "I look forward to discussing the president's proposal with my colleagues in the months ahead."
Obama spokesman Jay Carney said there's no reason to continue special tax breaks for the oil industry that were designed for times when oil prices were low, given that prices and industry profits are now high and the companies "don't need them."
The president Wednesday made a strong push for his corporate tax reform proposal.
"Our current corporate tax system is outdated, unfair, and inefficient," Obama said. "It provides tax breaks for moving jobs and profits overseas and hits companies that choose to stay in America with one of the highest tax rates in the world. It is unnecessarily complicated and forces America's small businesses to spend countless hours and dollars filing their taxes. It's not right, and it needs to change."
"That's why my administration released a framework for reform that simplifies the tax code, eliminates dozens of tax loopholes and subsidies, and promotes job creation right here at home. It's a framework that lowers the corporate tax rate and broadens the tax base in order to increase competitiveness for companies across the nation. It cuts tax rates even further for manufacturers that are creating new products and manufacturing goods here in America."
"Finally, because no company should be able to avoid paying its fair share of taxes by moving jobs and profits overseas, this framework includes a basic minimum tax for every multinational company. This reform is fully paid for, and it won't add a dime to the deficit."
Category: General Business
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