Obama Seeks Corporate Tax-Infrastructure Deal
Obama budget proposes multinational tax break tied to funding infrastructure. Bloomberg: "President Barack Obama will propose that U.S.-based companies pay a minimum 19 percent tax on their future foreign earnings ... Obama will also seek a 14 percent mandatory tax on about $2 trillion in stockpiled offshore profits ... creating a revenue stream the president would use to pay for roads, bridges and other infrastructure projects ... Obama is offering U.S. companies the kind of system they have sought -- one with lower corporate marginal tax rates and with future foreign profits subject to little or no extra U.S. tax when brought home. However, he’s offering to do so on terms that are less favorable than companies would want..."
Obama proposes more infrastructure than in previous proposals. WSJ: "Mr. Obama’s corporate tax proposal ... would pay for part of a six-year, $478 billion infrastructure upgrade ... The plan represents a significant expansion of Mr. Obama’s previous four-year, $300 billion infrastructure proposal. He also seeks more revenue from U.S. multinationals to pay for it—about $238 billion, compared with about $150 billion last year."
Republicans reject. W. Post: "...Michael Steel, a Boehner spokesman, expressed skepticism Sunday about Obama's infrastructure proposal. 'Everyone agrees that we need to rebuild our crumbling infrastructure, but absent real tax reform, this sounds like a tax hike that will cost more American jobs,' he said ..."
Obama Budget Ends Deficit-Cutting Obsession
Budget maintains size of deficit. NYT: "The deficit number would creep up each year, to $687 billion by 2025. But measured against the economy, the deficit would remain stable. The debt, while growing every year, would creep down to 73.3 percent of the gross domestic product in 2025 from 75 percent this year and next. Those levels are higher than at any time in the nation’s history except for World War II and its immediate aftermath."
Sets up fight with Republicans. Bloomberg: "The plan challenges Republicans to make politically thorny choices between defending current tax rates for the wealthy and Obama’s proposals to boost spending for the middle class, the Pentagon and companies that build domestic infrastructure."
"Obama’s new budget will put pressure on Republicans" says W. Post's E. J. Dionne: "...the Republicans are [now] responsible for passing a budget through two houses of Congress, so differences within the GOP that could be finessed in the past will have to be dealt with openly ... The president is aware that the most damaging alliance in Washington has been the one between establishment deficit hawks [and] Republican conservatives ... The president will call this bluff by putting $1.8 trillion in long-term deficit reduction on the table. But most of it will come on the revenue side..."
NYT's Paul Krugman hopeful budget will end obsession with austerity: "Faced with mass unemployment and the enormous waste it entails, for years the Beltway elite devoted almost all their energy not to promoting recovery, but to Bowles-Simpsonism ... it’s refreshing to see signs that Mr. Obama is willing to break with the long-termers and focus on the here and now."
Higher Capital Gains Taxes, More Child Care
Obama budget seeks higher capital gains taxes. Politico: "Obama’s budget will be full of nonstarters for Republicans ... including the higher capital gains tax rate and the closing of what White House officials call the 'trust fund loophole,' a provision that allows huge amounts of inherited capital gains to go untaxed."
And proposes to transform child care. HuffPost's Jonathan Cohn: "Obama’s budget will call for a set of targeted tax breaks and spending initiatives for working families that would represent a commitment of more than $200 billion over 10 years ... the federal government would provide matching funds to states that set up programs to provide 3- and 4-year-olds with day care ... [and] increase the Child and Dependent Care Tax Credit ... tripl[ing] the allowance and let[ting] more families claim it."
But also tries to entice Republicans into breaking budget caps. Politico: "...Obama has crafted his numbers so that two-thirds of the additional money would go to defense, veterans and international affairs — all priorities for key Republican players on the Senate Budget Committee .... the president’s new populist rhetoric about 'middle-class economics' seems to apply more to how he would pay for the new appropriations — not the spending itself."
