Perhaps the most important piece of Obama’s address, from the White House’s perspective, was Obama’s recommendations on how to achieve $1.5 trillion in tax reform. But enacting a rewrite of the tax code likely would be Obama’s most significant challenge, despite the fact that the super committee has the leeway to attempt such a feat. Republicans are set on not raising taxes, and although GOP representatives on the super committee have expressed an initial openness to tax reform, most major budget negotiations this summer, including those between Boehner and Obama, broke down over revenues.
The White House is seeking to hit its $1.5 trillion target by allowing the Bush-era tax cuts for the uppermost earners to expire and eliminating tax loopholes and other special interest provisions from the tax code. That includes raising taxes on carried interest and cutting tax preferences for high-income households as well as eliminating tax breaks to oil and gas companies and benefits to corporate jet owners.
“We didn’t think that just calling for tax reform and not putting details out there was sufficient in the environment we’re in, and we’re putting out a list of specifics, which we would hope would jump-start the process,” a senior administration official said Sunday evening.
The official added that the tax reform provisions would seek to “boost job creation and growth” and would be designed to comply with what White House insiders have come to call the “Buffett Rule,” named after billionaire business mogul Warren Buffett. Buffett, along with many Democrats, has argued the rich should pay their “fair share” of the nation’s revenues burden.
By giving an easily digestible brand to its tax reform approach, the White House is certainly trying to make a difficult policy issue easier to understand politically in an attempt to shore up its case with voters frustrated by a sputtering economy.
In a statement sent moments after the president finished speaking, Senate Minority Leader Mitch McConnell (R-Ky.) dismissed Obama’s proposals. “Veto threats, a massive tax hike, phantom savings, and punting on entitlement reform is not a recipe for economic or job growth — or even meaningful deficit reduction. The good news is that the Joint Committee is taking this issue far more seriously than the White House,” McConnell said.
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