Former presidential candidate and Forbes magazine executive editor Steve Forbes recently spoke out concerning the Obama administration’s plan to cut the corporate tax rate from 35 to 28 percent.
The plan as outlined by Treasury Secretary Tim Geithner would seek an even lower effective rate for manufacturers, but according to Forbes, the plan is a “not-so-stealth tax increase” that will do more harm than good.
Here are the key points Forbes made during his interview with Newsmax last Wednesday:
The government plays games in terms of picking winners and losers instead of trying to have a neutral tax code. Their “code” is the buddy system of Obama admirers, such as Solyndra investers.
Taxing overseas earnings would be devastating to this global economy, reducing deductability of interest, trying to put taxes on S-Corps and limited liability corporations which would cripple small businesses, playing games with the oil industry and the aircraft industry, going after life insurance, trying to make deductability in terms of investments less by giving a premium to inflation.
The proposed tax rate on dividends would soar to almost 45 percent, and strike yet another blow to America’s recovery. The elimination of almost all tax shelters and deductions would add billions to the cost of goods and services at the consumer level.
It will hurt the value of equities, whether it’s direct ownership through mutual funds or through pension funds.
The economy is too fragile for this ambitious and “destructive” plan to alter the corporate climate during a severe recession. Although the U.S. economy overall is likely to improve marginally in 2012, “It’s the equivalent of being on an open highway. Last year we went 20 miles per hour. This year we might get it up to 35 or 40 when we should be doing 70-75 miles an hour.”
Forbes pointed to the Dow Jones industrial average briefly surging past 13,000 mark last Tuesday for the first time since May 2008. The executive editor of Forbes believes it should be higher.
“Having the 15 percent alternative flat tax, I think, is an excellent step in the right direction and I hope eventually prompts Gov. Romney and the others to follow suit,” Forbes said.
Forbes is under the impression that Obama’s tax plans are nothing more than fuel for his re-election effort among the “have-nots” who misinterpret the role corporations play in American society. “It’s a campaign document as was the State of the Union address.”
Forbes is considered a potential vice-presidential candidate should his good friend, former Florida governor Jeb Bush, enter the race next month.
That’s a long shot much like Forbe’s presidential campaigns of the past have been.
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