Camp entered the fiscal cliff negotiations with the president aiming to get his commitment to a tax package that goes beyond raising rates and revenue.
If there were any question that a top-to-bottom rewrite of the tax system was on the agenda for 2013, it was removed late Tuesday, when news leaked that the White House had offered to accelerate an overhaul of the corporate tax system as part of a larger deficit reduction agreement.
The White House proposal completed a picture on corporate taxes that has been coming into focus over the past two years as business groups have argued for changes in the structure for corporate taxes while the issue has been overshadowed by the larger attention on individual tax rates.
President Barack Obama’s decision to include a corporate tax overhaul in the broader fiscal cliff discussions may not sway many Americans on the differences between the parties on those big tax and spending issues, but it’s dear to the businesses the White House has been trying to win over.
“The National Retail Federation and our members have long advocated for comprehensive tax reform that includes broadening the base and lowering rates so that American businesses, which pay the highest corporate tax rates in the world, can compete on a level playing field in the global marketplace,” Matthew Shay, president and CEO of the retailers’ group, said after word of the White House offer came out.
But with an enormous stake in the outcome of any tax system alterations for businesses, the group also wants the changes made in a considered, deliberate way — that gets corporations the lower tax bills they argue lead to greater investment and expansion.
“If Congress and the administration are serious about reforming our uncompetitive tax system, it’s critically important that the plan is discussed openly and in detail, with every stakeholder, and should be just one part of a broader approach to reforming the long term fiscal situation of the U.S. economy,” Shay said.
That suggests that a major battle over a corporate tax overhaul is waiting in the wings next year, if lawmakers back away from the fiscal cliff in the coming weeks.
Right now, if Obama has his way, upper-bracket tax rates on the income of individuals and couples will be allowed to go up on schedule at the end of the year. Then, in 2013, Congress and the administration will set about trying to scale back various deductions and credits for individuals and businesses, raising enough revenue to both lower tax rates for individuals and businesses and reduce the deficit further.