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Obama Sets Out Tax Reform Proposals

by Leroy Baker, Tax-News.com, New York

19 September 2007


Democratic presidential hopeful, Barack Obama on Tuesday proposed ending tax breaks for large corporations and a crackdown on offshore financing, as part of a tax reform plan that he says will give billions of dollars in tax cuts to low and middle income Americans.

Obama claimed that as President, he would relieve the middle class tax burden by $85 billion, giving 150 million Americans a tax cut of up to $1,000. He proposed easing the burden on these taxpayers by providing a universal homeowner tax credit to those who do not itemize their deductions, immediately benefiting 10 million homeowners, the majority of whom make under $50,000 per year.

Obama would also eliminate all income tax for seniors making less than $50,000 per year, and simplify tax filing so that a tax return can be completed in less than 5 minutes.

These reforms would be paid for by closing corporate loopholes, cracking down on international tax havens, increasing tax on carried interest, and increasing the dividends and capital gains rate for the top bracket, he revealed.

"I'll restore simplicity to the tax code, and fairness for the American middle class," Obama declared in a speech outlining his tax proposals in Washington D.C. on Tuesday.

"It's time to stand up to special interest carve outs. I'll end the preferential treatment that's built into our tax code by eliminating corporate loopholes and tax breaks. We shouldn't be distorting our tax code to benefit a few powerful interests - we should be insisting that everyone pays their fair share, and when I'm President, they will," he stated.

Barack promised to "shed some sunlight not only on companies that abuse the tax code, but also on the secretive offshore tax havens that shelter them".

"We'll create a list of countries where tax evaders hide their income and cost America untold billions of dollars every year. We'll lead the international community to new standards of information sharing. And we'll penalize companies and individuals who use those havens and illegally evade their tax obligations," he remarked.

"If we're going to keep that social compact for a new century, we need a tax code that's fair - a tax code that rewards work and advances opportunity. Every American who is ready to work for their American dream should be able to trust that they have a government that works for them. I'll keep that trust by cutting taxes for working people, homeowners, and seniors, and by simplifying tax filing for middle class Americans," he concluded.


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