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Small Businesses Feel Excluded from Obama Corporate Tax Proposal

President Barack Obama released a new business tax proposal last week, followed closely by comments and criticism from money-minded members of Congress. Broadly speaking, the Obama Administration's proposal to cut the corporate tax rate to 28% has received fairly positive reviews from both sides of the political aisle. Officials and business advocates that dug into the details, however, found a bit more to criticize.

Chief among their concerns was the Obama proposal's continued reliance on a minimum tax rate for overseas earnings by multinational firms, regardless if that money ever makes its way back to the United States. Critics consider the minimum rate to be a form of double taxation.

"Even the president's own Bowles-Simpson Commission recommended abandoning this system, which the rest of the developed world has already done," said House Ways and Means Committee Chairman Dave Camp (R-MI), whose comments were echoed by the U.S. Chamber of Commerce. "It's appropriate for the White House to acknowledge that the corporate tax code stifles economic growth, undermines the competitiveness of U.S. firms and needs reform," said Chamber President and CEO Thomas Donohue. "However, we're disappointed the White House proposal does not adopt a territorial tax system that would put an end to the double taxation of profits earned by U.S. companies overseas. America is the only major country that disadvantages its own firms competing globally. These companies employ millions of Americans here at home and make significant contributions to our economy."

Without getting too specific, the National Federation of Independent Businesses (NFIB) criticized the administration's corporate tax proposal for being just that: a corporate tax proposal. "The focus should be on individual rate reform," said NFIB CEO Dan Danner. "Reforming the corporate tax code does not help the majority of small businesses; in fact, it creates even more uncertainty by taking away the deductions that many small business owners count on each year. Furthermore, as complicated as the tax code is, this plan from the administration will make it even more complicated for a small business owner."

"Once again, President Obama has demonstrated that he knows big business, not small," he added. "At what point does big business stop dictating the policies in Washington, DC?"

Jacob Barron, CICP, NACM staff writer