1/31/2014
President Obama made only a brief mention of taxes in his State of the Union address January 28, using the speech to repeat his prior calls for corporate tax reform to create jobs in the United States and fund infrastructure projects.
Obama noted bipartisan criticisms of the current code for being too complex, stifling domestic investment, and creating incentives for keeping profits offshore. He said that instead, tax reform should end “incentives to ship jobs overseas, and lower tax rates for businesses that create jobs right here at home.” The call for reform is similar to the one Obama made in his 2013 State of the Union message, but details were even more sparse than last year when the White House released a post-speech fact sheet that called for a 25 percent tax rate for domestic manufacturing and an “offshoring tax” that would set a minimum tax on offshore earnings. (For prior coverage, see Tax News & Views, Vol. 14, No. 9, Feb. 15, 2013.) URL: http://newsletters.usdbriefs.com/2013/Tax/TNV/130215_2.html
Echoing a speech he made at an Amazon facility in Tennessee in late July, Obama also called for using “the money we save with [the] transition to tax reform” to create jobs on infrastructure projects. (For coverage of the president’s Tennessee speech, see Tax News & Views, Vol. 14, No. 32, Aug. 2, 2013.) URL: http://newsletters.usdbriefs.com/2013/Tax/TNV/130802_2.html
As he has done in the past, the president also made a call for repealing tax benefits for fossil fuels and steering those incentives toward green energy, although he did not identify specific proposals. Consistent with prior statements from the administration that the corporate and individual tax rules need not be revamped simultaneously, the president made no mention of individual tax reform. The president did offer a few smaller proposals on the individual side when he called for an increase in the earned income tax credit for low-income workers without children, the creation of a “MyRA” retirement savings plan that would be invested in Treasury bonds for certain employees, and the establishment of automatic enrollment in IRAs for employees without access to a workplace savings plan (a proposal he has put forward in every budget since he took office).
In a fact sheet released in conjunction with the speech, the White House also listed, largely without elaboration, certain issues that were not directly mentioned in the president’s remarks but will be addressed in his fiscal year 2015 budget. In an apparent allusion to prior budget proposals that called for limiting the amounts that certain higher-income individuals may accumulate in tax-preferred retirement savings accounts, the fact sheet notes that “the president wants to work with Congress to make sure that when we take steps to reform our tax code that we also reform upside-down retirement tax incentives.” URL: http://www.whitehouse.gov/sites/default/files/sotu_2014_main_fact_sheet.pdf
Courtesy of Deloitte Touche
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