Reuters: Small Business News: White House: Closing tax loophole could fund student loans

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White House: Closing tax loophole could fund student loans Apr 24th 2012, 17:34 Tweet Share this Email Print Related News Obama, courting youth vote, sets student-loan push Fri, Apr 20 2012 Obama, top Senate Democrat split on nuclear nominee Thu, Apr 19 2012 House votes again to approve Keystone XL pipeline Wed, Apr 18 2012 Obama has confidence in Secret Service chief: White House Tue, Apr 17 2012 Buffett rule fails Senate vote in tax fight Mon, Apr 16 2012 Analysis & Opinion Essential reading: Looking for tax money to fund a student loan break, WIN America shuts down, more Essential reading: U.S. House passes small business tax cut, New York sues Sprint, more Related Topics U.S. » Small Business » The White House is pictured shortly after sunrise in Washington, August 1, 2007. Credit: Reuters/Jason Reed ABOARD AIR FORCE ONE | Tue Apr 24, 2012 1:34pm EDT ABOARD AIR FORCE ONE (Reuters) - The White House said on Tuesday that it was reviewing whether a small business tax loophole should be closed to pay for an extension of low interest rates on student loans that President Barack Obama wants Congress to deliver. The loophole allows some shareholder-employees of so-called "S corporations" to avoid paying the Medicare payroll tax on their earnings. "We've certainly been in discussions with senators about that - that is certainly an option that is a good potential option," said White House press secretary Jay Carney traveling with Obama. "It meets the standard we set that we cannot pay for it in a way that harms students." Obama was heading to North Carolina on the first leg of a tour of three battleground election states in which he will urge Congress to stop interest rates from rising on 7.4 million students. The action could appeal to middle class and younger voters vital to his hopes for re-election in November. Carney said that closing the tax loophole was among a variety of potential ways to pay for the estimated $6 billion cost of a one-year extension of the loan rates, which otherwise will double on July 1 to 6.8 percent. An S-Corporation does not pay corporate taxes but passes income through to the individual shareholders, who can report it as profits rather than wages in order to lower their tax burden. It is sometimes called the "John Edwards" loophole after the former Democratic vice presidential nominee, who formed an S-Corporation in the 1990s when he was a trial lawyer. (Reporting by Jeff Mason; Editing by Jackie Frank) Tweet this Link this Share this Digg this Email Reprints We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/ Comments (0) Be the first to comment on reuters.com. Add yours using the box above.

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