While President Obama unveiled a tax proposal today that the White House described as a new initiative to stimulate the economy, Congressional Republicans eagerly dismissed it as the same warmed over ideas they rejected long ago.
The president is mounting an economic offensive that he hopes will bring Washington’s attention back to the economy, in advance of budget fights in the fall that will likely be bruising.
Obama visited an Amazon distribution center in Chattanooga, Tenn. to revive his proposal to cut corporate tax rates in return for a commitment from Republicans to invest more in programs spurring middle-class jobs. The White House is describing this as a “grand bargain” on jobs that will stimulate the economy while giving businesses the lower tax rates they have long sought.
Timothy F. Geithner, Obama’s former Treasury secretary, first proposed the idea in early 2012, at the start of the presidential campaign, to reduce the corporate tax rate to 28 percent from 35 percent—with a lower rate of 25 percent for manufacturers.
But Congressional Republicans want a 25 percent corporate rate—the same rate proposed by Republican presidential candidate Mitt Romney.
The White House called it a big concession from the president, but Republicans immediately dismissed the proposal.
“It’s the opposite of a concession,” said Brendan Buck, a spokesman for House Speaker John A. Boehner, R-Ohio.
The president has been saying for years now that the economy can create jobs by investing in public-works projects, higher education, advanced manufacturing and scientific research. At the same time, he has sought to offset the spending with proposals to repeal or reduce tax breaks for wealthy individuals and corporations, especially oil companies—an idea Republicans have opposed.
Lawmakers from both parties have said an overhaul of corporate taxes should be done along with a rewrite of the tax code for individuals.
Republicans claim many smaller businesses file their tax returns using the individual tax code.
“The president claims his economic agenda is for the middle class. But it’s actually for the well-connected,” Rep. Paul Ryan (R-Wisconsin), Romney’s running mate, wrote in an editorial in USA Today. “There’s no doubt that it works well for them. But for the rest of us, it’s not working at all. Today we have record poverty and high unemployment. For too many families, the American Dream is out of reach. What the president is really offering is to replace government by the people with government by the experts. So he might call his plan a grand bargain. But I call it a raw deal.”
