It's not very grand, and as for being a bargain, I got a bridge over the Chicago River I'd like to sell you if you believe that.
Basically, the deal would involve the president agreeing to cut corporate tax rates if the GOP agrees to fund more "infrastructure" spending with the one time windfall that cutting corporate tax rates would entail. The cut in rates would also include closing loopholes, leading to an unknown amount of extra revenue that Obama wants to spend on a new stimulis package.
Wall Street Journal:
Many Republicans say that any new revenues from a tax code overhaul must be devoted to covering the cost of lowering tax rates. The White House made clear that if Republicans held to that position and opposed funding for jobs programs, Mr. Obama would not go along.
In past years, the Obama administration has put forward business tax plans that would reduce the top rate from 35% to 28%, end certain tax advantages, cut the rate on manufacturers to 25% and impose a minimum tax on foreign earnings, among other measures. The changes would be deficit-neutral. They would also pay for certain business tax breaks that get extended each year but aren't offset with other budget changes.
The GOP has proposed changes to offset the cost of lowering rates to 25%.
Mr. Obama's proposal appears to open the door to raising revenue on a one-time basis from several sources in the tax code.
One is the international area. Currently U.S. businesses can largely avoid federal taxation on their overseas earnings, as long as they don't bring the money back to the U.S. As a result, American companies have built up large stockpiles of cash offshore. They also have invested heavily in offshore assets, such as foreign businesses.
Moody's Investor Service in a March report said the U.S. companies it rates held $1.32 trillion in cash and estimated that 58%, or $840 billion, was held overseas.
A number of proposals in Congress would change that in the short term, allowing businesses to pay a special, low tax rate on the profits that are trapped offshore and encouraging the companies to bring more of them back home.
Most often those proposals are part of a broader plan to eventually end the U.S. tax on overseas profits. That would put the U.S. in line with most other developed countries, which seek to tax only domestic profits.
An administration official cited this area as one likely to be targeted by Mr. Obama as part of his new proposal.
Another possible change would raise revenue by slowing the rate at which businesses can depreciate plant and equipment. Businesses likely would still get the full depreciation, just over a longer period of time.
The GOP would dearly love to reform the corporate tax code, but not if it means several hundred billion dollars being thrown down the black hole of stimulus.
The deal is unlikely to fly - a fact that Obama is fully aware. It's just one more opportunity for him to accuse the GOP of "obstruction" for wanting to protect the taxpayer from the ravages of the president's spending schemes.