According to the Wall Street Journal, former chairman of President Obama’s Council of Economic Advisers, Austin Goolsbee, says that one of the best ways for the U.S. to promote economic growth is to increase its exports in broadly defined areas such as entertainment, royalties, tourism and travel services.
President Obama has proposed to raise the tax rate for corporate dividends to 44.8 percent next year, which the Wall Street Journal reports is nearly triple the 15 percent corporate rate. The paper argues that since dividends are distributed after the 35 percent corporate tax has been paid, the effective dividend tax rate would hit 64.1 percent.
The President also has an appearance scheduled Feb. 24 at the University of Miami, where he will flesh out his State of the Union call for the U.S. to boost investment in clean energy as a way to strengthen its economy. The White House is concerned that rising gas prices could cripple the current recovery and also hurt President Obama’s reelection hopes. Obama has acknowledged that the extra $40 a paycheck that the average family will receive from the payroll tax-cut extension may now be needed to help cushion the blow of higher gas prices.
Oil was trading at $106 a barrel for the gasoline benchmark West Texas Intermediate late on Feb. 21, its highest since May 2011, following Iran’s weekend threat to cut off oil supplies to Britain and France. Gasoline prices, at record highs for this time of year, rose to $3.59 per gallon, further fueling the political fight that is set to define the coming months.
White House press secretary Jay Carney defended the administration’s energy policy, arguing that the administration’s self-proclaimed “all-of-the-above” energy policy is the best way to reduce U.S. dependence on foreign oil.
President Obama’s corporate tax reform plan would cut the corporate tax rate from 35 to 28 percent. The proposal would be paid for by closing loopholes and cutting subsidies. The proposal also carves out an exception for manufacturers – reducing their rate to 25 percent – and would set a minimum tax on foreign earnings to discourage “accounting games.” The plan is not likely to go as far as a House Republican proposal to lower the rate to 25 percent, and neither plan is expected to gain any traction until after the November elections.
According to Bloomberg, the current U.S. corporate tax rate is the second-highest marginal rate in the world, but the effective tax rates on U.S. companies is below 30 percent, in line with other major economies.
The President has urged voters to push lawmakers to act on the tax proposal, along with his proposals to help struggling homeowners and to raise taxes on millionaires. He has lobbied for a proposal to let homeowners who owe more on their mortgages than their homes are worth, and are current on their payments, to save $3,000 per year through refinancing into lower-interest loans guaranteed by the Federal Housing Authority.