Obama Proposes Changes in Corporate Tax System

March 12, 2012

Unlocking Word Meanings
Read the following words/expressions found in today’s article.

1. corporate (adj.) – related to corporations or large group of companies
Example: Companies are expected to follow corporate laws.

2. get rid of (v. phrase.) –  to remove something unwanted
Example:   The president will get rid of rules that treat employees unfairly.

3. slash (v.) – to cut down
Example:  Some stores slashed the price of old cellphone models to half.

4. inhibit (v.) – to prevent or keep someone from doing an activity
Example: His sickness inhibited him from going to school.

5. compete (v) – to engage in a contest or competition
Example:  Job applicants compete with one another to get the best position in the company.

Read the text below.

US president Barrack Obama is proposing new changes to the US’ corporate tax system.

Obama’s proposals, first revealed last month, plan to get rid of tax breaks for US companies that operate overseas. With “tax breaks,” these companies only pay low taxes to the US government.

The weakness in this law was clearly seen in 2010, when the company General Electronics earned billions of dollars in profit, but paid zero tax to the US government. Part of the reason for the zero tax was that all of the company’s business operations had been moved to other countries.

Additionally, Obama’s plans will slash tax rates for US-based companies, which are currently affected by 35% tax, one of the highest tax rates in the world. The high tax scares away foreign investors, inhibiting US companies from having foreign connections needed to compete internationally.

Moreover, the changes will reward US-based companies that give jobs to people locally. According to Obama, it is not fair that companies which choose to stay in the US are being taxed too high, while other companies that send jobs and profit abroad are given tax breaks.

The president is now trying to convince business executives to accept the proposals. The Obama administration says that the changes will promote fairness in the business field, as well as help give the US funds for economic growth.

Viewpoint Discussion
Enjoy a discussion with your tutor. 

Discussion A

·         Should everyone pay the same amount of taxes? Why or why not?
·         In your opinion, what kinds of people or companies should pay less tax?

Discussion B

·         Do you think taxes are necessary? Please explain your answer.
·         What other ways can the government earn money besides collecting taxes?


March 12, 2012