Opinion: recovery

Thứ Năm, 23 tháng 2, 2012

Would Obama's corporate tax cut speed the recovery?

The president wants to slash the tax rate on businesses — but raise corporate tax revenue by eliminating loopholes On Wednesday, President Obama proposed cutting the U.S. corporate tax rate from 35 percent to 28 percent. But the administration insists that this wouldn't deplete federal coffers. Instead, the plan would actually generate more revenue for the federal government, because Obama wants to eliminate loopholes and subsidies that allow many corporations to pay a lot less than 35 percent, and in some cases, zero. Obama is also proposing a minimum tax on foreign earnings. Is this sensible, overdue reform, or a recovery-killing tax hike in disguise?

The proposal would doom the recovery: "This is a terrible, terrible plan," says James Pethokoukis at The American. The stagnant economic recovery is already "arguably the worst in modern American history," and instead of giving corporate America a hand, Obama now wants to saddle companies with so-called reform that would "actually raise the tax burden on American business by $250 billion over a decade." That would make us less competitive than ever, and doom our chances of bouncing back anytime soon.
"Why Obama's corporate tax plan is a total bust"

It's a step in the right direction: Obama's proposal "is a helpful start to the much-needed discussion about how best to reform the corporate tax code," Maya MacGuineas, president of the Committee for a Responsible Federal Budget, tells Reuters. But if anything, it doesn't go far enough. What the U.S. really needs is comprehensive reform of the corporate and individual tax codes at the same time. "That would be a real boost to the economy."
"Obama urges corporate tax cut, closing loopholes"

Obama's plan won't affect the economy much either way: U.S. corporate profits have already "rebounded to their pre-recession heights," says Pat Garofolo at ThinkProgress. And despite all of the whining from the Right, the tax rate that U.S. companies actually pay is the second lowest in the world. That helps explain why our corporate tax haul is at a 40-year low. But because Obama's plan doesn't aim for a truly significant revenue increases, it won't make much difference at all.
"5 key facts about the Obama administration's corporate tax overhaul"

Face it — this proposal is all about the election: "There's little chance... that this tax reform proposal will make it through Congress," says Norah O'Donnell at CBS News, which means Obama's plan will have no impact whatsoever on the economy. But it will play a role in the presidential election. Leading GOP candidate Mitt Romney unveils his own economic plan this week, and Obama is itching to start an election-year debate in which he's the one who looks like a tax cutter and reformer.
"White House wants election year fight over taxes"

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The economic recovery: Proof Obama's stimulus worked?

After years of sputtering, the U.S. economy seems to be picking up steam. But Republicans say the president's policies have only gotten in the way With the Dow Jones Industrial Average topping 13,000 for the first time since 2008, confidence is growing that the economy is finally on the mend. And President Obama appears to be reaping the political benefits, with his rising favorability ratings improving his re-election prospects. Republican presidential candidates, however, insist that the economy is improving despite Obama's burdensome policies, like the $787 billion stimulus package, not because of them. How much credit can Obama take for the economy's climb?

Obama's "ballyhooed" stimulus was an utter failure: The unemployment rate, which stood at 8.3 percent in January 2012, is literally unchanged from February 2009, says John Merline at Investor's Business Daily. There are now 5.5 million people who have been out of work for at least 27 months, up 83 percent from when Obama took office. And the civilian labor force has shrunk by 126,000 since Obama's inauguration. "In past recoveries, the labor force climbed an average of more than 3 million over comparable time periods." Obama's economic policies simply haven't delivered.
"Obama stimulus turns three: What has it achieved?"

Nonsense. The stimulus was integral to the recovery: Look, says Derek Thompson at The Atlantic. We'll never know with "utter certainty" whether the stimulus truly worked because "we can't compare this world, where the stimulus happened, to a make-believe world where it didn't happen." But if we objectively look at the data, "we can say with reasonable certainty that the stimulus did support growth, prevent layoffs, and make the economy better." And by most any measure — whether's it's real GDP or job growth — the "economic turnaround coincided with the passing of the stimulus." Give Obama credit.
"The stimulus absolutely, positively worked, no doubt about it, probably"

But the economy might not be recovering at all: "Employers are hiring, manufacturing is revving up, and stocks are rallying," says Annalyn Censky at CNN. But that doesn't mean a true recovery is upon us. A showdown with Iran could push gas prices to $4 or $5 a gallon this spring. Job cuts by cash-strapped states and other public agencies are a continued drag on the economy. (Remember, "the government is the largest employer in the country.") And the "escalating European debt crisis" could level the still-feeble U.S. and global economy. Clearly, we aren't "on the path to a sustained recovery" quite yet.
"Economy in recovery? Not so fast"

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