The tax pandering season got into high gear with both President Obama and Presumptive-Nominee-In-His-Own-Mind Mitt Romney coming out with tax reform proposals on Wednesday.
As The Washington Post points out, Romney would cut all individual income tax rates by 20%.
But beware! Here’s Joe the Tax Guy’s Rule Of Across-the-Board Tax Cuts: Across-the-board cuts favor the Top 1%. A 20% tax cut for someone earning $10 million is enough to pay cash for an extra vacation home or two. A 20% cut for someone earning $50,000 is enough for an extra Happy Meal or two.
Obama would cut the top corporate tax rate from 35% to 28%, with the loss in revenue made up by closing loopholes that already effectively leave most corporations paying significantly less than 35%. As The New York Times points out, Republicans and business groups want an even lower rate and no change in the current system of business breaks and loopholes.
Joe the Tax Guy’s Rule of Business Tax Cuts: When proposed rate cuts are supposed to be paid for by closing business tax loopholes, there will probably be new loopholes created…or no change to the old ones.