May 04 2009
Closing Tax Loopholes is Much Ado About Nothing
The Obama administration’s crack down on off shore corporate tax shelters is a positive move in terms of tax fairness and may represent a philosophical shift from previous administrations but from a dollars and cents standpoint it represents negligible gains in revenues.
According to an article in the Wall Street Journal several corporations are paying significantly less than they were just a year ago:
Even with Obama’s new plan, however, the same corporation will contribute only slightly more, roughly $25billion per year. Corporate taxes comprise roughly 14.4% of total federal revenues as is:
At $350 billion per year this will up the corporate income tax collected 5%, which is very insignificant when further diluted by the greater economy. It is good to seek out fairness, and there will be hemming and hawing from the pundits but overall there are a minority of major, corporate institutions that are able to take advantage of these loopholes anyway. Medium and small sized corporations will see little change and the overall tax base won’t really notice.
