Obama's 'Grand Bargain' On Taxes Is Neither Grand Nor A Bargain

IBD ^ | 07/31/2013

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President Obama has proposed a "grand bargain" with Republicans: They get a tax cut for corporations, he gets more money to spend on worthless government stimulus. That's no bargain — that's surrender.

In the latest attempt by Democrats to disguise GOP capitulation as centrist "compromise," Obama said he'll sign off on a cut in the corporate tax rate from 35% to 28% — with an even lower rate of 25% for manufacturers — if Republicans will agree to spend more on Obama's "investments" and OK a tax hike on U.S. companies doing business overseas.

Republicans, beaten up daily by the mainstream press for being "extremists," might be tempted to take Obama's offer of what he calls a "grand bargain for middle-class jobs." They shouldn't.

To begin with, Obama's big spending — nearly half a trillion more per year — has met with zero success, so why pour more money into failure?

That higher spending, along with slower economic growth due to Obamanomics, is the main reason why we're stuck with record annual deficits of close to $1 trillion — and why the national debt has doubled to more than $17 trillion in just five years.

Since Obama's "stimulus" took effect, job growth has been subpar, GDP gains are at record lows, median incomes have shrunk and the number of Americans on welfare has surged. So we know that won't work. But what about corporate tax cuts?

The nonpartisan Tax Foundation reckons a simple cut in the corporate tax rate to 25% would boost GDP more than 2% and wages by nearly as much. And capital investment would jump more than 6%.

Moreover, a corporate cut would increase federal revenues and help lower our deficits — assuming, that is, Obama doesn't spend the new money.

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TAKE NOTE FRiends:

Part of Obama’s “bargain” is to increase taxes on U.S. companies that operate abroad and to reduce business writeoffs for investments — the seed corn of future economic growth.

Even at 28%, Obama’s new tax rate would be higher than the 25% average paid by our main competitors overseas.

[Ghost of SVR4]

They're after all that offshore cash from companies like Apple and Motorola to name a few. Apple is sitting on billions overseas because the U.S. tax laws would rape those profits if they tried to bring it back "home". Seems to me the government is trying to figure out how to go after that.

Its not going to be long before they come after the trillions in retirements and pensions, the juggernaut can't be fed tax revenue fast enough now..