POLITICS: White House

Critics doubt President Obama's commitment to tax reform

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Photo - WASHINGTON, DC - MARCH 01:  U.S. President Barack Obama speaks to the media after meeting with Congressional leaders at the White House, March 1, 2013 in Washington, DC. (Photo by Mark Wilson/Getty Images)
WASHINGTON, DC - MARCH 01: U.S. President Barack Obama speaks to the media after meeting with Congressional leaders at the White House, March 1, 2013 in Washington, DC. (Photo by Mark Wilson/Getty Images)
Politics,White House,Brian Hughes,Politics Digest

President Obama has used "tax fairness" as a rallying cry amid unrelenting fiscal feuds with Republicans, but critics say the president has less interest in making the tax code less burdensome than in using the phrase to fire up his supporters.

When Obama talks about taxes, it's usually to argue that wealthy individuals and corporations aren't paying their fair share, not so much about the increasingly complex rules and returns that Americans had to deal with before Monday's Tax Day deadline.

"When the tax code was created in 1913, it was about 400 pages," said House Budget Committee Chairman Paul Ryan, R-Wis. "Today, it's over 70,000. We need to simplify the code and make it fairer."

Conservatives point to Obama's newest budget, which raises taxes by more than $1 trillion, as proof that his calls for tax reform are empty.

Obama's budget proposal would reduce itemized deductions for the wealthiest Americans, limiting write-offs to 28 percent of their income -- a measure that would raise nearly $530 billion over the next decade.

The White House estimates that the so-called Buffett Rule, which sets a minimum 30 percent tax rate for millionaires, would raise an additional $53 billion if enacted. A change in the cost-of-living calculation for Social Security benefits would raise an additional $100 billion, a higher cigarette tax would generate $78 billion, and a slew of other taxes and fees would put the total new tax bill beyond $1 trillion over the next 10 years.

Obama has told Republicans he would lower the corporate tax rate -- from 35 percent to 28 percent -- but only if they agree on the rest of his wish list, including the tax increases.

"Now is our best chance for bipartisan comprehensive tax reform that encourages job creation and helps bring down the deficit," Obama insisted during his State of the Union address.

Republicans counter that corporate tax rates should be lowered separately from the president's other demands on tax policy. They call new taxes unacceptable after having already agreed to raise rates earlier this year for families making more than $450,000 annually.

"Americans pay high taxes as it is ... and tax revenue is growing beyond its historical average as a share of the economy," Romina Boccia, an economist at the Heritage Foundation, said. "Future Tax Days promise to be even worse because of the tax increases from the 'fiscal cliff' deal and from Obamacare. Taxpayers will start seeing these costs when they do their tax returns next April and in future years."

Washington leaders for years trumpeted the idea of tax reform but have been unable to move such a massive piece of legislation through a divided Congress. Rep. Dave Camp, R-Mich., and Sen. Max Baucus, D-Mont., are now working on their own proposals.

But such blueprints risk being overshadowed by Congress' focus on comprehensive immigration reform and a slate of new gun restrictions.

"It doesn't seem like there's much overlap between the White House's and our position on tax reform," said one House Republican budget staffer. "We're still waiting for the president to get serious -- I'm not holding my breath."

bhughes@washingtonexaminer.com

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