Corporate tax cuts: This could be the start of a beautiful friendship

This could be the start of a beautiful friendship

by digby

The Obama administration is quietly gearing up for a high-profile launch in May or June on what may turn out to be the most heavily lobbied issue of the year: corporate tax reform.

At a time when the two parties can find little common ground legislatively, strategists on both sides tell POLITICO they hope to advance their jobs agenda by finding a way to lower corporate tax rates.

“This would send a reassuring signal to the economy, and is something both parties should support in theory,” a senior administration official said, predicting “a numbers game” in which companies and industries ferociously litigate the fine points.

God knows the economy is sensitive to these "signals" so that's good. (It's just been a little distracted by fundamentals these past two years.) And I don't get the feeling they think this "ferocious litigation" is a bad thing, do you? But then it is election season ...

Treasury Secretary Timothy Geithner plans to ignite the debate by unveiling a white paper that advocates lowering the top corporate tax rate from the current 35 percent to less than 30 percent and as low as 26 percent, according to aides. The proposal is likely to fall between 26 percent and 28 percent.

To pay for that, the proposal will call for closing loopholes and slicing exemptions. The two main ones are a tax deduction for domestic manufacturing and accelerated depreciation for capital equipment.

Aides say Geithner will personally dive into the negotiations. House Speaker John Boehner also sees this as a ripe area for bipartisan cooperation. And House Budget Committee Chairman Paul Ryan included corporate tax reform in his budget, which has been adopted as the GOP’s fiscal blueprint.

Agreeing on how to rework corporate taxes will be tough, and many aides remain privately pessimistic. But the two sides’ willingness to try to find common ground is a notable departure from their stances on most other contentious issues on the Capitol Hill docket.

Why hell, let's just pass it by acclamation and start collecting the checks. (Just write them out to cash, the politicians might need to borrow a few bucks for their campaigns before it comes back to the treasury.)

Not to rain on this bipartisan love fest but it is probably a good idea to remind ourselves of this. If people don't smell the scam in "closing corporate loopholes" and then lowering the corporate tax rate to fix the deficit while lobbyists "ferociously litigate" the details then I can't help them.

Update: Nothing to see here folks, nothing at all:

BREAKING – FORTUNE 500 cover story, “Profits of the 500 Largest U.S. Corporations Soar by 81% ($318 Billion), the Third Largest Percentage Gain in List History … Wal-Mart holds the number one spot for the second year in a row … Exxon Mobil leads profits with $30 billion, for the 8th year in row. …

FORTUNE editors write, ‘We’ve rarely seen such a stark gulf between the fortunes of the 500 and those of ordinary Americans. … The profits derived partly from productivity gains, including workforce reductions. And many 500 companies are growing faster overseas than in the U.S.”