President Proposes “Grand Bargain” on Corporate Tax Reform, But Business Groups Reject the Plan

August 02, 2013

This week, President Obama proposed to lower the corporate tax rate from 35 percent to 28 percent in exchange for spending more on creating jobs, but the proposal was quickly rejected by the Business Roundtable and faces long odds in Congress.  In a speech on how to jumpstart the economy, President Obama said he is "willing to work with Republicans on reforming our corporate tax code, as long as we use the money from transitioning to a simpler tax system for a significant investment in creating middle-class jobs. That's the deal."  However, BRT President John Engler responded, "All revenues from corporate base-broadening measures should be applied to corporate rate reduction and to modernizing our international tax system, not for unrelated spending."  While the President and key congressional Republicans, such as House Ways and Means Committee Chairman Dave Camp (R-MI), agree that U.S. companies that have amassed profits overseas should pay a tax or fee to bring those funds home, they disagree on how that money should be used.  The President wants more spending on opening manufacturing institutes and investing in community colleges to train workers.  Chairman Camp would like a lower corporate tax rate and broader tax reform changes.