Obama: ‘Now is our best chance’ for tax reform

Still, in saying the time was now for tax reform, Obama also underscored the significant hurdles a tax overhaul faces. 

{mosads}The president noted that the recent “fiscal cliff” deal raised taxes on the top 1 percent of earners, but stressed that he wanted more revenue to help rein in the federal debt. Obama has, for years, also sounded more interest in overhauling the tax code for corporations, while others have called for more a comprehensive approach.

“To hit the rest of our deficit reduction target, we should do what leaders in both parties have already suggested, and save hundreds of billions of dollars by getting rid of tax loopholes and deductions for the well-off and well-connected,” Obama said.

“Now is our best chance for bipartisan, comprehensive tax reform that encourages job creation and helps bring down the deficit.”

But congressional Republicans – including GOP leaders and top tax writers – have long said that revenue gained from eliminating tax breaks should be used solely to reduce tax rates. 

Republicans have been especially strident about keeping tax reform revenue-neutral after the recent “fiscal cliff” deal that raised more than $600 billion in revenue by allowing tax rates to rise for the highest earners. GOP lawmakers say that streamlining the code and lowering rates would give a jolt to economic growth.

Boehner has even said that House Republicans are debating whether to go forward with tax reform, even though it’s long been a top priority and many GOP lawmakers campaigned on the issue.

Some Republicans, Boehner said last month, think “’Gee what kind of tax reform can we ever get signed into law considering the position of our president?’ And so that debate is just beginning. It’ll probably grow, and I’m sure you’ll read all about it.”

Even with those challenges, the top tax writers on Capitol Hill, Senate Finance Chairman Max Baucus (D-Mont.) and House Ways and Means Chairman Dave Camp (R-Mich.), have said they will press ahead with reform efforts this year.

Camp, who is scheduled to be in his final term as Ways and Means chairman, has said the panel will pass a plan this year. Baucus, who faces a potentially tough re-election campaign in 2014, has said he agrees that more revenues are needed for deficit reduction, but also wants to make tax reform is done right.

Obama, as part of a plan to help the middle class released Tuesday, also called for setting a minimum tax on corporate offshore earnings, which the White House says would increase investments in the U.S. and keep more domestic jobs.

The White House included a similar proposal in their corporate tax framework last year. Camp, meanwhile, has proposed exempting most offshore corporate profits from U.S. taxation, something he says will encourage companies to bring more cash home. 

“Apparently, what is old is new again,” a GOP aide said about the president’s plan.