For every proposed Obama tax “loophole” closed, lower tax rates dollar for dollar

After Barack Obama rammed his $620 billion tax increase bill through Congress with hardly any Republican support, he is now advocating even more tax increases.  He, of course, will not use all of these gargantuan and economy-dragging tax increases to reduce the national debt nor his annual $1 trillion deficits   --  four such deficits so far and counting  --  but President Obama will use the additional tax revenue for his new spending programs. 

Indeed, President Obama was in North Carolina yesterday pushing for all kinds of new spending programs including $1 billion in federal aid for a network of 15 so-called “innovation institutes” which will foster “more efficient” business models.  This guy’s appetite for new government programs is insatiable.  You would have thought that the absolute failure of Obama’s $1 trillion stimulus program in 2009 would have taught him a lesson.  But listening to both his second inaugural speech and his state of the union speech on Tuesday shows that Obama absolutely is not chastened by the abject failure of his big government programs and he wants even more spending. 

President Obama’s latest scam to intimidate Republicans in Congress into voting for “revenue enhancement”   --  for Obama and his party, it is no longer a tax increase proposal since the congressional Republicans have promised not one more dollar of tax increases and a large majority of Americans want only deficit and debt reduction through spending cuts  --  is to call for closing tax “loopholes”. 

“Businessweek” in its November 14, 2012 article, “The Problem With Patching Up the Tax Code,” reported that tax “loopholes” cost the Treasury some $1.3 trillion each year.  The article says:  “House Speaker John Boehner favors broadening the tax base to generate more revenue without raising rates…. Obama, while continuing to demand higher rates on top incomes, says limiting the use of loopholes for the wealthy could be part of the solution.”  President Obama got his higher tax rates in spades earlier this year to the tune of $620 billion and now he wants several hundred billion dollars more from “the wealthy” by closing their tax loopholes.

Republicans could go along with closing some tax “loopholes.”  However, many congressional Republicans want a dollar cut in tax rates for every dollar of tax “loopholes” closed.  Examples of such “loopholes” are second-home mortgage interest deductions; tax breaks for corporations which ship jobs overseas from their domestic plants/sites; reduction of the primary-home mortgage deduction for those with higher incomes; subsidies to corporate/conglomerate farmers who get about 80% of the agriculture subsidies; etc.

Besides devoting revenue saved by closing “loopholes” to middle class tax relief in the form of lower rates, the Republicans, in bipartisan fashion, could go along with the president’s proposal yesterday in North Carolina to cut the corporate tax rate from 35% to 25%.  “The Washington Times” reported today in a front-page article entitled “On the road, Obama told to go home; Industry leaders want budget, not more aid,” that Jay Timmons, president and CEO of the National Association of Manufacturers, said that “cutting the corporate rate for manufacturers to 25% is only a start  --  Canada’s tax rate is 15%.”   Mr. Timmons also was quoted saying that the Obama administration’s inability to compromise with Republican lawmakers have been causing manufacturers to pull back from hiring and expansion plans.

The high-pitched partisanship and lack of cooperation with congressional Republicans emanating from the president for the past four years has resulted in an unemployment rate which has averaged over 8% during Obama’s entire time in office and millions of Americans leaving the job market altogether.  Congressional Republicans should immediately introduce and pass legislation to close tax “loopholes;” possibly in the range of a half trillion dollars or more. 

All of that tax “loophole” revenue should then be devoted to cutting the tax rates for the middle class and lowering the corporate tax rate to between 15% and 20% which will be a good beginning.