Reuters: Small Business News: Obama again seeks to pare tax breaks for corporations, wealthiest

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Obama again seeks to pare tax breaks for corporations, wealthiest Feb 13th 2013, 02:22 U.S. President Barack Obama waves to reporters as he walks through the colonnade of the White House in Washington February 12, 2013. Credit: Reuters/Yuri Gripas By Kim Dixon WASHINGTON | Tue Feb 12, 2013 9:22pm EST WASHINGTON (Reuters) - President Barack Obama will renew his bid to curb tax breaks prized by corporations and the wealthiest Americans in a speech on Tuesday laying out his legislative agenda, but the proposals are sure to face familiar roadblocks from congressional Republicans. The president will propose to "reform our business tax code, (lower) the corporate tax rate with an even lower rate for manufacturers," and set a minimum tax on offshore earnings, according to a fact sheet provided by the White House ahead of the annual State of the Union address to Congress. Obama also will back tax reforms that close "loopholes for the wealthy," according to the summary. If the plan sounds familiar, it should, because the ideas largely mirror those Obama pitched in his address a year ago. Since then, he won re-election campaigning on tax fairness and Republicans lost congressional seats, but even the president's backers say they face a tough road. "Unless Republicans have a real 'come to Jesus moment,' it is difficult to imagine them supporting many or any of these provisions," said Jim Manley, a former top adviser to Democratic Senate Majority Leader Harry Reid. The speech comes as another fiscal crisis brews in a stand-off between the White House and congressional Republicans, this time over automatic spending cuts set to kick in on March 1. Obama and fellow Democrats back a mix of revenue and tailored spending cuts to avoid what is known as the "sequester," while Republicans oppose any tax increases. Democrats and Republicans both say they want a full-scale revamp of the U.S. tax code - but they are far apart on how to get there. Republican Representative Dave Camp, who chairs the tax-writing House Ways and Means Committee, is working on a plan to revamp the tax code. Senate Finance Committee Chairman Max Baucus, a Democrat, is also working on a proposal. But a full-scale tax code overhaul is a massive endeavor, and it has been somewhat crowded out by issues like immigration and gun control in recent weeks and months. "It is not an issue that has much momentum behind it, but having people like the president and Dave Camp talking about it will help that," said Erik Smith, a former adviser to Obama who now advises companies at Blue Engine Media. Obama has also called for review of the corporate tax code - including lowering the top corporate tax rate to 28 percent from 35 percent, to be paid for by closing business tax breaks. Republicans back a lower corporate rate, but have resisted the idea of tackling it in isolation because many businesses file taxes through the individual side of the tax code and would be left out. (Reporting By Kim Dixon; Editing by Kevin Drawbaugh and Eric Beech) Link this Share this Digg this Email Reprints

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