Obama renews corporate tax proposals
President Obama used his State of the Union address Tuesday to intensify the push for his plan to exchange slashed corporate tax rates for a boost in infrastructure spending.
{mosads}Obama first laid out his framework in July, and was widely expected to take up its cause during Tuesday’s speech.
“Both Democrats and Republicans have argued that our tax code is riddled with wasteful, complicated loopholes that punish businesses investing here, and reward companies that keep profits abroad. Let’s flip that equation,” Obama said.
“Let’s work together to close those loopholes, end those incentives to ship jobs overseas, and lower tax rates for businesses that create jobs right here at home.”
Under the plan, the top corporate tax rate would be reduced from 35 percent to 28 percent, while the infrastructure spending would be paid for with a “transition fee” on companies holding profits offshore.
“We can take the money we save with this transition to tax reform to create jobs rebuilding our roads, upgrading our ports, unclogging our commutes – because in today’s global economy, first-class jobs gravitate to first-class infrastructure,” the president said.
But the plan, which was panned by Republicans over the summer, got no better reviews on Tuesday.
GOP lawmakers also want to reduce the corporate tax rate – down to 25 percent – but say the president’s plan would leave out the businesses that pay taxes as individuals. Speaker John Boehner’s (R-Ohio) office, in a Tuesday release, noted that the president had previously proposed corporate tax reform without the transition fee.
Either way, GOP leaders in the House and Democratic leaders in the Senate have showed little interest in going all out for tax reform this year, despite the interest from the top tax writers on Capitol Hill.
During the State of the Union, the liberal group U.S. PIRG praised Obama for going after offshore corporate profits, but also stressed that many of the details to the plan would need to be filled in.