Obama only wants to make it “fair” for those who support him. Even Obama’s ex economic adviser, Christina Romer, points out Obama unfairness.
WASHINGTON (AP) — President Barack Obama wants to close dozens of loopholes that let some companies pay little or nothing in taxes. But he also wants to open new ones for manufacturers and companies that invest in clean energy.
To some analysts, the new loopholes risk upending the level playing field Obama says he wants to create.
Some also fear that companies could game the system to grab the new tax breaks.
“The administration is not making sense,” says Martin Sullivan, contributing editor at publisher Tax Analysts. “The whole idea of corporate tax reform is to get rid of loopholes, and this plan is adding loopholes back in.”
Economists across the political spectrum support a kind of grand bargain: cut corporate tax rates while deleting tax breaks that benefit a favored few.
So Obama’s plan is cutting loopholes for industries he doesn’t support and turns around to grant industries he does support (green energy) tax loopholes. Even his ex economic adviser believes favoring one sector over another is unjustified….
…Other economists say that argument is overstated. Among the skeptics is Obama’s own former economic adviser, Christina Romer, an economics professor at the University of California, Berkeley. In a column this month in The New York Times, Romer argued that there was no economic justification for the government to favor manufacturers over service-oriented companies.
“Our earnings from exporting architectural plans for a building in Shanghai are as real as those from exporting cars to Canada,” Romer wrote.
The administration hasn’t yet defined which companies would qualify for the manufacturing or clean-energy-tax incentives. Tax analysts suspect that some companies would work the political system to make sure they’re eligible for any new tax breaks.
