The "effective Tax Rate" Myth

There's an argument that high US corporate tax rates are not a problem because abundant loopholes lower the "effective tax rate." (You can see it repeated in the comments on this morning's feature post.)

But this isn't a compromise. It's a double whammy. High rates plus abundant loopholes = maximum economic distortion. Companies are induced to engage in complex (and costly) tax engineering. Investment is distorted and misdirected. Democrats used to recognize this. In 2004, Sen. John Kerry combined advocacy of loophole closing with a call for cutting the corporate tax rate (admittedly not by much: from a crushing 35% to an only marginally less perverse rate of 33.25%). Still, he grasped the principle of the thing. Why doesn't President Obama?