Senate Minority Leader Mitch McConnell, R-Ken., said he expects President Obama to call for lowering the corporate income tax rate during the president’s State of the Union address on Tuesday evening.
McConnell made the prediction during an appearance on Fox News Sunday. “I’m told he’s going to come out for lowering the corporate tax rate,” McConnell told host Chris Wallace on Sunday. “I'm told he's going to come out for lowering the corporate tax rate. We have the second highest corporate tax rate in the world right now. It's not competitive. It doesn't help us create American jobs in America. To the extent he actually, Chris, wants to do some of these things, our answer is going to be yes.”
The statutory corporate tax rate is currently as high as 35 percent, although many corporations pay a much lower effective tax rate after taking into account various deductions and tax credits.
The White House has been tight-lipped about the contents of the State of the Union address, but Treasury Secretary Tim Geithner recently indicated some willingness to cut the corporate tax rate (see Geithner Mulls Corporate Tax Reform).
However, the Obama administration reportedly wants any changes in corporate taxes to be revenue neutral, so it won’t reduce the total amount of tax revenue collected from corporations. The presidentially appointed bipartisan deficit commission in its recent report recommended cutting the corporate tax rate.
Geithner has been holding meetings with CFOs and other business leaders, as well as representatives from organized labor, academia and think tanks, to gauge their opinions on ways to encourage businesses to create more jobs. An unnamed administration official told the National Journal on Friday that the White House would only support corporate tax reform if business groups agree to abide by a revenue neytral approach. “We need to test the true appetite of business for reform that simplifies the system and lowers rates without making the deficit worse,” said the official.
One of the executives who has been providing input to Geithner is GE CEO Jeffrey Immelt, who was named Friday as head of the president's new Council on Jobs and Competitiveness.
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