Close this search box.
Close this search box.

The Pros and Cons of Obama’s Corporate Tax Plan

President Obama and Congressional Republicans could come together around some version of the new plan in his budget bill for overhauling U.S. corporate taxes and linking it to boosting infrastructure spending. But CEOs and independent analysts see plenty of potential complications before any agreement that could significantly address both of these pressing national economic issues.

Obama wants U.S. companies to pay a 145 tax on the approximately $2 trillion of overseas earnings they have accumulated, The Wall Street Journal reported. They would face a 19% minimum tax on future foreign profits, but companies could reinvest those funds in the U.S. without paying additional tax.

“If President Obama’s tax plan is approved, companies would face a 19% minimum tax on future foreign profits.”

Politically, there’s some attraction in this idea for both sides for at least 3 reasons.

  1. It addresses the undeniable impulse in high U.S. corporate tax rates that keeps compelling CEOs of American companies to try “tax-inversion” maneuvers by buying foreign companies and domiciling there so they can be taxed at rates that are lower in most other countries.
  1. It would tackle the problem of America’s allegedly crumbling roads and bridges, which has been said to have the potential for crippling the nation’s future economy. Plus there are financial incentives politicians can offer construction companies who get involved in a government-sponsored road-and-bridge-repairing campaign.
  1. Both Democrats and Republicans believe that Americans want them to come together around a common cause to prove that Washington can “govern” again. This might be the change agent.

But many obstacles remain before any such deal is reached, including vast differences in how this idea is perceived. Here are 3 popular but mostly conflicting views:

  1. It could prove a brilliant re-set of current thinking. The proposed reforms “could foster a change in corporate thinking,” opined The New York Times’ Upshot. “Companies would make their financing and investing decisions with more of an eye to pretax profits rather than tax planning. American companies tie themselves in knots to avoid bringing foreign profits home … A revised system would focus investing decisions toward the highest returns, while preventing companies from taking advantage of tax havens, even if it would sometimes lead American companies to “ship jobs overseas.”
  1. It could be a poison pill. Some warn that any such agreement could create only a temporary fix and even something of a poison pill. It “would do little to change the long-term incentives to keep profits abroad,” the Journal editorialized, “or help U.S. tax competitiveness. The revenue windfall would be better used to support a larger corporate tax reform that permanently lowers rates. ”
  1. It could be overwhelmed by political polarization. Some pundits are calling, for example, for a strong partisan response to Obama’s idea. “Refusing to bite on Mr. Obama’s carrots would be a good way for Republicans to re-establish credibility with American voters,” Daniel Henninger wrote in the Journal. “The most lasting contribution of the conservative insurgency out in the country may be that it blew the whistle on Washington’s bipartisan crony capitalism. Republicans should use infrastructure to join the whistleblowers … ‘Infrastructure’ is code for the campaign contributions that flow back to the politicians only after they spend someone’s taxes on cement bicycle paths and bullet trains.”

One thing is for sure: Unlike many other issues during which President Obama and American CEOs were decidedly opposed in principle and often in politics, resolving the corporate-tax dilemma uncommonly holds out the possibility of creating a win-win scenario.



  • Get the CEO Briefing

    Sign up today to get weekly access to the latest issues affecting CEOs in every industry
  • upcoming events


    Strategic Planning Workshop

    1:00 - 5:00 pm

    Over 70% of Executives Surveyed Agree: Many Strategic Planning Efforts Lack Systematic Approach Tips for Enhancing Your Strategic Planning Process

    Executives expressed frustration with their current strategic planning process. Issues include:

    1. Lack of systematic approach (70%)
    2. Laundry lists without prioritization (68%)
    3. Decisions based on personalities rather than facts and information (65%)


    Steve Rutan and Denise Harrison have put together an afternoon workshop that will provide the tools you need to address these concerns.  They have worked with hundreds of executives to develop a systematic approach that will enable your team to make better decisions during strategic planning.  Steve and Denise will walk you through exercises for prioritizing your lists and steps that will reset and reinvigorate your process.  This will be a hands-on workshop that will enable you to think about your business as you use the tools that are being presented.  If you are ready for a Strategic Planning tune-up, select this workshop in your registration form.  The additional fee of $695 will be added to your total.

    To sign up, select this option in your registration form. Additional fee of $695 will be added to your total.

    New York, NY: ​​​Chief Executive's Corporate Citizenship Awards 2017

    Women in Leadership Seminar and Peer Discussion

    2:00 - 5:00 pm

    Female leaders face the same issues all leaders do, but they often face additional challenges too. In this peer session, we will facilitate a discussion of best practices and how to overcome common barriers to help women leaders be more effective within and outside their organizations. 

    Limited space available.

    To sign up, select this option in your registration form. Additional fee of $495 will be added to your total.

    Golf Outing

    10:30 - 5:00 pm
    General’s Retreat at Hermitage Golf Course
    Sponsored by UBS

    General’s Retreat, built in 1986 with architect Gary Roger Baird, has been voted the “Best Golf Course in Nashville” and is a “must play” when visiting the Nashville, Tennessee area. With the beautiful setting along the Cumberland River, golfers of all capabilities will thoroughly enjoy the golf, scenery and hospitality.

    The golf outing fee includes transportation to and from the hotel, greens/cart fees, use of practice facilities, and boxed lunch. The bus will leave the hotel at 10:30 am for a noon shotgun start and return to the hotel after the cocktail reception following the completion of the round.

    To sign up, select this option in your registration form. Additional fee of $295 will be added to your total.