White House Proposing Ending Tax Loopholes to Fund Economic Recovery Measures
As President Obama prepares to launch new legislation designed to stimulate job growth and the overall economy, he is also proposing to eliminate some corporate tax breaks and close some longstanding loopholes to pay the estimated $180 million price tag for the proposed plans.
"For years, our tax code has actually given billions of dollars in tax breaks that encourage companies to create jobs and profits in other countries. I want to change that," Obama said in speech delivered in Cleveland on Wednesday.
A White House spokesman said that closing certain tax loopholes could potentially create $300 billion in revenue which could be used for the Administration's proposed economic recovery measures. With Americans expressing concern about not only the economy, but the rising deficit, lawmakers are aware that any new costly recovery measures will have to come with cuts somewhere to provide the funding.
Which corporate tax breaks would be cut has not been divulged yet, but the Administration has previously identified several unnecessary tax breaks in budget proposals which the Congress has not yet acted on. One involves placing a limit on the amount of interest companies who have moved overseas can deduct for their US subsidiaries. The change would reportedly free up about $1.7 billion. Another proposal in the 2011 budget would eliminate a manufacturing tax deduction for large oil and gas companies. That move could free up $15 billion.
However the money for any future economic recovery moves is attained, funding for any future measures will be vital to Congressional passage. And any proposed cuts of corporate tax breaks will have a swarm of hired lobbyists poised to fight them.