One important element in President Obama’s corporate tax reform plan is that he would make the renewable energy production tax credit (PTC) permanent.
The reform plan says that providing only temporary tax breaks has led to instability and uncertainty in renewable energy industries and their investors, preventing growth.
“This approach has created an uncertain investment climate, undermined the effectiveness of our tax expenditures and hindered the development of a clean energy sector in the United States,” it says.
The new tax code would repeal tax preferences for oil and gas production.
The priorities of the plan are:
1. Eliminate dozens of tax loopholes and subsidies, broaden the base and cut the corporate tax rate to spur growth. Reinvest these savings to lower the corporate tax rate to 28%, putting the US in line with major competitor countries.
2. Strengthen American manufacturing and innovation: refocus the manufacturing deduction and use the savings to reduce the effective rate on manufacturing to a maximum 25%, while encouraging R&D and production of clean energy.
3. Establish a minimum tax on foreign earnings to remove the incentive to operate overseas or shift profits abroad. It would also discourage the global race to the bottom in tax rates.
4. Simplify and cut taxes for America’s small businesses.
Here is President Obama’s plan: