State of Union light on tax talk
Wednesday, January 26, 2011
Given the empty seat set aside for Rep. Gabrielle Giffords, the Arizona Democrat recovering from a head wound suffered a few weeks ago, Obama's calls during last night's State of the Union for national unity and optimism were not surprising.
If the video of the State of the Union address
does not open in your browser, you can watch it here.
Neither was it unusual that the president didn't really get into specifics on any policy issues. The commander in chief's annual talk to lawmakers and the nation, regardless of the Oval Office's occupant, is really just one big cheer leading session.
We'll get a better picture of just what Obama wants to accomplish when he releases his annual budget in February.
But here are the tax topics that he mentioned, at least in passing, during his State of the Union address.
Corporate taxes: Obama wants Congress to rewrite the corporate tax code, which he said now leaves businesses unable to hire hire high-dollar lobbyists paying "one of the highest corporate tax rates in the world. It makes no sense, and it has to change."
Savings from a corporate tax code overhaul, said Obama, would allow the country "to lower the corporate tax rate for the first time in 25 years –- without adding to our deficit."
It can be done, he added, but didn't go into detail.
Individual taxes: The president suggested lawmakers might want to think about taking on our individual tax code, too. Such an effort would be appreciated, the prez indicated, saying:
"In fact, the best thing we could do on taxes for all Americans is to simplify the individual tax code. This will be a tough job, but members of both parties have expressed an interest in doing this, and I am prepared to join them."
Obama also referred to the bipartisan fiscal commission he created last year. Among its recommendations was to eliminate all tax expenditures and dramatically lower individual and corporate tax rates.
Like that's going to happen.
And Obama implicitly acknowledged that major tax reform, even if bipartisan goodwill holds (I repeat, like that's going to happen), is a slim possibility when he noted his own ambivalence toward some of the panel's recommendations:
"I don't agree with all their proposals, but they made important progress. And their conclusion is that the only way to tackle our deficit is to cut excessive spending wherever we find it –- in domestic spending, defense spending, health care spending, and spending through tax breaks and loopholes."
As I said, pretty vague. Or, as my tax-blogging colleague The Wandering Tax Pro characterized it, in his speech the president took a "wouldn't that be nice" approach to tax reform.
The one specific tax item Obama addressed last night was his campaign trail call, which he abandoned temporarily with the tax extension deal he cut in December with Republicans, to keep pressing for an increase in the individual tax rate for families making more than $250,000 a year.
Tax breaks: When it comes to who benefits from all those tax expenditures, aka tax breaks, cited by the deficit panel, Obama wants to end some and add some.
First, on the out side, the prez wants Congress "to eliminate the billions in taxpayer dollars we currently give to oil companies." Take that money, he suggested, and put it toward other energy sources.
On the benefits addition side, Obama wants to make it possible for more folks to further their educations.
"That's why we've ended the unwarranted taxpayer subsidies that went to banks, and used the savings to make college affordable for millions of students," Obama said. "And this year, I ask Congress to go further, and make permanent our tuition tax credit –- worth $10,000 for four years of college."
The credit to which he was referring is the American Opportunity credit, which was continued through 2012 under the tax law enacted in December.
And that, folks, is about it as far as it gets for taxes and the 2011 State of the Union.
Again, the lack of specificity is nothing new. Now we wait for details from the White House in the upcoming budget and how receptive Congress, especially the Republicans now in charge of the House, will be to specifics.
I doubt there will be the polite applause we heard last night.
- The new tax bill and your 2010 taxes
- Deficit commission tax overhaul, take 2
- Taxpayer Advocate calls for tax reform
- Deficit cutting proposals are not popular
- Debt panel suggests major tax changes
Want to tell your friends about this blog post? Check out the buttons -- Tweet This, Reblog, Like, Digg This and more -- at the bottom of this post. Or you can use the Share This icon to spread the word via e-mail and and online avenues. Thanks!
Thanks for highlighting the tax related portions of the SOTU.
The devil is in the details... as they say.
We're sure taxes are going to be a huge 2012 topic. Get ready to be bombarded with ads
Posted by: Charles | Thursday, January 27, 2011 at 06:56 PM