President Obama is considering whether to push early next year for an overhaul of the income tax code to lower rates and raise revenues in what would be his first major effort to begin addressing the long-term growth of the national debt.
While administration officials cautioned on Thursday that no decisions have been made and that any debate in Congress could take years, Mr. Obama has directed his economic team and Treasury Department analysts to review options for closing loopholes and simplifying income taxes for corporations and individuals, though the study of the corporate tax system is farther along, officials said.
The objective is to rid the code of its complex buildup of deductions, credits and exemptions, thereby broadening the base of taxes collected and allowing for lower rates — much like a bipartisan majority on Mr. Obama’s debt-reduction commission recommended last week in its final blueprint for reducing the debt through 2020.
Doing so would offer not only an opportunity to begin confronting the growth in the national debt but also a way to address warnings by American business that corporate tax rates and the costs of complying with the tax code are cutting into their global competitiveness.
Mr. Obama signaled his inclination in off-the-cuff remarks on Wednesday as he was defending the tax cuts deal negotiated with Congressional Republicans this week. “We’ve got to have tax reform,” he said.
Economic and political advisers say the process is in its early stages, and Mr. Obama ultimately could decide against such action, given the pitfalls, both political and substantive. In the past, any effort to alter the tax code has provoked powerful opposition among interest groups, and the picking of winners and losers.
Yet proponents within the administration and among some outside advisers say that Mr. Obama, by putting tax reform atop the national agenda, could seize an opportunity to take the offensive in dealing with the newly empowered Republicans in Congress, repair his strained relations with business and embrace a potentially powerful theme heading into his re-election campaign.
I have to admit, the Times' Jackie Calmes does a laudably efficient job of packing in all the Villager tropes on this story in the first 300 words or so: Bipartisanship Village style (giving into Republican demands), the Catfood Commission are the smartest people on Earth, it'll be good for his re-election campaign and my personal favorite, Obama needs to give businesses more because they are being crushed under taxation despite the fact that last quarter resulted in record nominal profits for them.
I'm not sure where the whole tax simplification thing came from as far as Obama's concerned, but you notice the Catfood Commission tax scheme (lowering taxes on the rich more than makes up for the deductions they'd lose, but the middle class would pay more due to lost deductions despite the lower rates, and the poor would pay more due to a higher rate) seems perfectly okay with Obama, at least in theory. Thay may not be what he means, of course we have no numbers, but I don't hold it as a good sign.
The larger problem is the fact we have larger problems than simplifying the tax code right now.
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2 comments:
Obama needs to give businesses more because they are being crushed under taxation despite the fact that last quarter resulted in record nominal profits for them.
And businesses are sitting on record piles of cash.
He talked about this in the campaign and the deficit comm. he did & some think tanks also did & they all simplified the tax code b/c it brings in more revenue which means fewer cuts & more to spend. Rachel & Keith screamed abt deficits & debt all week while attacking the prez abt taxcuts along w/various libs & the House. They may now reapeth what thou soweth!
There's an NPR intv w/prez that explains what he plans to concentrate on. lst priorities:
education,economy,infrastructure
He's not triangulating yet b/c although the taxcut are rethug ideas, he's still advocating his liberal values. True triangulation is adopting Repub ideas and adovocating for them as your own. But, let's continue the meme OBAMA FAIL!
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