President Obama on Tuesday will propose linking an overhaul of business taxes and new spending on jobs in what aides say is his latest effort to break the an impasse in Congress — but House Republicans immediately shot down the idea.
Obama will unveil his proposal in Chattanooga, Tenn., as part of his summer campaign to highlight his economic message and frame the upcoming fall debate over the federal budget. The president is searching for ways to ease Republican opposition to his economic priorities, such as boosting hiring through spending on roads, bridges and other infrastructure.
The proposal attempts to capitalize on Republicans’ long-held desire to reduce corporate tax rates, which they say put U.S. companies in an uncompetitive position globally. Obama says he wants to overhaul the tax code and use some of the new federal revenue generated – likely by taxing foreign profits of U.S. corporations – to pay for domestic initiatives. Obama has proposed spending $50 billion on infrastructure in the next year.
“The president will call on Washington to work on a grand bargain focused on middle-class jobs by pairing reform of the business tax code with a significant investment in middle-class jobs,” said Dan Pfeiffer, a senior adviser.
In principle, an overhaul of the corporate tax code could offer room for compromise. Both the White House and Republicans agree that corporate tax breaks should be reduced, and the resulting new tax revenues should be used to lower corporate tax rates.
The administration and key congressional Republicans, such as House Ways and Means Committee Chairman Dave Camp (R-Mich.), also agree that U.S. companies that have amassed profits overseas should pay a tax or fee to repatriate those funds.
But that is where agreement has largely ended — and, on its face, Obama’s proposal would not change that dynamic. In the past, the two sides have disagreed on what the new corporate tax rate should be, as well as on how to tax foreign profits in the future.
And Republicans have rejected the idea of using new revenue for spending of the sort of Obama wants.
House Republicans, who say they learned of the new offer through news media reports Tuesday morning, rejected down the proposal and dismissed the notion that it represented a new concession.
“The president has always supported corporate tax reform. Republicans want to help families and small businesses, too,” said Michael Steel, a spokesman for House Speaker John Boehner (R-Ohio).
“This proposal allows President Obama to support President Obama’s position on taxes and President Obama’s position on spending, while leaving small businesses and American families behind.”
Obama will unveil his proposal in Chattanooga, Tenn., as part of his summer campaign to highlight his economic message and frame the upcoming fall debate over the federal budget. The president is searching for ways to ease Republican opposition to his economic priorities, such as boosting hiring through spending on roads, bridges and other infrastructure.
The proposal attempts to capitalize on Republicans’ long-held desire to reduce corporate tax rates, which they say put U.S. companies in an uncompetitive position globally. Obama says he wants to overhaul the tax code and use some of the new federal revenue generated – likely by taxing foreign profits of U.S. corporations – to pay for domestic initiatives. Obama has proposed spending $50 billion on infrastructure in the next year.
“The president will call on Washington to work on a grand bargain focused on middle-class jobs by pairing reform of the business tax code with a significant investment in middle-class jobs,” said Dan Pfeiffer, a senior adviser.
In principle, an overhaul of the corporate tax code could offer room for compromise. Both the White House and Republicans agree that corporate tax breaks should be reduced, and the resulting new tax revenues should be used to lower corporate tax rates.
The administration and key congressional Republicans, such as House Ways and Means Committee Chairman Dave Camp (R-Mich.), also agree that U.S. companies that have amassed profits overseas should pay a tax or fee to repatriate those funds.
But that is where agreement has largely ended — and, on its face, Obama’s proposal would not change that dynamic. In the past, the two sides have disagreed on what the new corporate tax rate should be, as well as on how to tax foreign profits in the future.
And Republicans have rejected the idea of using new revenue for spending of the sort of Obama wants.
House Republicans, who say they learned of the new offer through news media reports Tuesday morning, rejected down the proposal and dismissed the notion that it represented a new concession.
“The president has always supported corporate tax reform. Republicans want to help families and small businesses, too,” said Michael Steel, a spokesman for House Speaker John Boehner (R-Ohio).
“This proposal allows President Obama to support President Obama’s position on taxes and President Obama’s position on spending, while leaving small businesses and American families behind.”