President Barack Obama held out the prospect that the administration and congressional Republicans can reach a deal on revamping the corporate tax code and said he wanted to start discussions early next year.
Speaking to a gathering of chief executive officers from some of the biggest U.S. companies, Obama said he’s open to accepting a short-term extension of dozens of tax breaks set to expire at the end of the year as a way to start negotiations on broader tax legislation.
“There is definitely a deal to be done,” Obama told members of the Business Roundtable meeting in Washington. Obama said that while he’s committed to simplifying the tax code for both corporations and individuals, it would be easier to accomplish by starting with businesses taxes.
The president spoke just hours before the U.S. House was set to vote on a $45 billion short-term bill to extend about 50 tax breaks until Dec. 31, 2014, meaning businesses and individuals could reap the benefits when they begin filing their 2014 taxes next month.
Obama said he wants to get started on tax negotiations early next year because it will take as much as nine months before any package could come up for a vote. It will be harder to pass legislation the closer it gets to the 2016 election.
Obama said his basic position has some overlap with the Republican stance on taxes in that both want to lower rates while broadening the tax base. On corporate taxes, Obama said his bottom line remains lowering rates while closing loopholes.
While Republicans previously have pushed to twin individual and corporate taxes in any rewriting of the law, Representative Paul Ryan, a Wisconsin Republican who is set to become chairman of the tax-writing Ways and Means Committee in January, suggested yesterday he might consider working on the business tax code first.
Obama said he’s unwilling to support any tax deal that “blows up the deficit” or shifts more of the tax burden to middle- and lower-income Americans.
Among the hurdles to a tax deal, Obama said, is “the classic problem that people are in favor of tax reform in the abstract” while opposing some of the specifics.
Closing loopholes, even with lower rates, means “there are going to be some winners and there are going to be some losers in the short term,” he said.
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