That was a trap.....here's the truth: Barack Obam

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If you only studied President Obama's corporate tax proposal by reading news stories about it, you might be under a misimpression: that Obama proposed a business tax cut, and Republicans are too spiteful to take him up on it.

Here's what really happened. Obama proposed a corporate tax overhaul that would cut the corporate tax rate from 35% to 28%. He would also greatly expand the corporate tax base, for example by reducing deductions for interest expenses and taxing more foreign income of U.S.-based multinationals.

These reforms would mean, in the long run, that the U.S. collects about as much corporate tax as it does under the current system. But in the first few years, the base broadeners would actually be designed so that revenue would go up. Obama wants to spend this money on infrastructure, community colleges, and promoting manufacturing.

So, Obama is proposing what amounts to a small, temporary tax increase to fund a small spending program. Republican opposition to this idea is not mystifying.

But many media accounts give the impression that Obama proposed a tax cut which Republicans are spurning. The New York Times, for example, describes the president's plan in the first paragraph of their story as "a cut in corporate tax rates in return for a pledge from Republicans to invest in more programs to generate middle-class jobs."

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