The overhaul, administration officials said, would generate new revenue that could be used to pay for Obama’s priorities, including hiring workers to build roads, bridges and other infrastructure.
“Here’s the bottom line: I’m 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,” Obama said Tuesday during a speech at an Amazon.com warehouse in Chattanooga, Tenn.
The visit was part of his summer campaign to highlight his economic message and frame the fall debate over the federal budget.
“If folks in Washington want a ‘grand bargain,’ how about a grand bargain for middle-class jobs?” Obama asked rhetorically.
But within hours, Republican leaders in the Senate and House had rejected and ridiculed the idea as a tired repackaging of old proposals.
“It’s just a further-left version of a widely panned plan he already proposed two years ago, this time with extra goodies for tax-and-spend liberals,” said Senate Minority Leader Mitch McConnell (R-Ky.), saying he had learned of the proposal late Monday night.
David Plouffe, a longtime Obama adviser, tweeted that the Republican reaction to the proposal “lays them bare again.” He wrote: “Not serious, Pavlovian opposition to even mainstream ideas.”
The White House proposal’s long odds were also underscored by opposition from the Business Roundtable, which represents the nation’s biggest companies.
“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,” said Business Roundtable President John Engler, a former Republican governor of Michigan.
In principle, an overhaul of the corporate tax code could offer room for compromise for both sides. Republicans and Democrats generally agree that the corporate tax code is unnecessarily complex, has excessively high official rates and hurts U.S. competitiveness globally.
The Obama administration and key congressional Republicans, such as House Ways and Means Committee Chairman Dave Camp (Mich.), also agree that U.S. companies that have amassed profits overseas should pay a tax or fee to bring those funds home. About $2 trillion in such profits remain abroad.
A fee on foreign profits could go a long way toward paying for the jobs proposals Obama wants, which also include opening manufacturing institutes and investing in community colleges to train workers. Obama has proposed $50 billion in jobs-related spending.