Politics

July 30, 2013

Obama challenges GOP to accept corporate tax deal

The president calls for lowering the corporate tax rate from 35 to 28 percent – and even lower for manufacturers – combined with investments in infrastructure, manufacturing and research to aid the middle class.

The Associated Press

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President Barack Obama speaks at the Amazon fulfillment center in Chattanooga, Tenn., Tuesday, July 30, 2013. Obama came to Chattanooga to give the first in a series of policy speeches on his proposals for private sector job growth and to strengthen the manufacturing sector. (AP Photo/Susan Walsh)

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Workers at an Amazon distribution center photograph President Barack Obama after he spoke to the group, Tuesday, July 30, 2013, in Chattanooga, Tenn. Obama spoke on his proposals for private sector job growth and ways to strengthen the manufacturing sector. (AP Photo/Mark Humphrey)

The U.S. has one of the highest corporate tax rates in the world, but many businesses avoid the full cost by taking advantage of deductions, credits and exemptions that Obama wants to eliminate.

Obama wants to do away with corporate tax benefits like oil and natural gas industry subsidies, special breaks for the purchase of private jets and certain corporate tax shelters. He also wants to impose a minimum tax on foreign earnings, a move opposed by multinational corporations and perhaps the most contentious provision in the president's plan.

John Engler, president of the Business Roundtable, welcomed Obama's call for lowering the corporate tax rate. But like many Republican lawmakers, he called for addressing individual tax rates at the same time and said he opposed using corporate tax overhaul revenue for "unrelated spending."

"Corporate tax reform should be part of a comprehensive fix for the individual and business tax codes, and corporate reform should be achieved in a revenue-neutral manner," said Engler, who heads the association of business leaders.

The backdrop for Obama's remarks Tuesday was an Amazon fulfillment center, a massive, 1 million-square-foot warehouse. During a tour of the facility, Obama was shown how the company gets packages ready for delivery, from the employees who pull orders from three stories of floor-to-ceiling shelves, to loading into boxes sealed with water-activated tape and quality control

Amazon announced Monday that it would add 7,000 new jobs, including 5,000 more at U.S. distribution centers that currently employ about 20,000 workers who pack and ship customer orders.

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