Daily Tax Update - January 25, 2011: Economy, Deficit Focus Of State Of the Union

ECONOMY, FEDERAL BUDGET, AND REDUCING DEFICIT TO BE FOCUS OF STATE OF THE UNION ADDRESS:  President Obama’s State of the Union address tonight is expected to focus primarily on boosting the economy and reducing the deficit.   However, corporate tax reform is expected to be a component of the President’s remarks.  The specifics of the President’s objectives for the coming year will be released as part of his FY 2012 budget in mid-February. 

  • An Obama Administration adviser, Valerie Jarrett, said today that the speech would be "all about America winning."  Jarrett said the President will focus on "winning for the future and what we have to do to be competitive in this global marketplace."  Jarrett added, "We have to figure out how to make government more efficient, streamline government, make sure we're creating an environment where companies want to invest in growth.  And, very importantly, we have to tackle our fiscal deficit in a responsible way and bring that down.  At the end of this evening's speech, that message will be loud and clear to the American people."
  • According to Austan Goolsbee, Chairman of the President’s Council of Economic Advisers, President Obama would consider lowering corporate taxes as one of a variety of proposals intended to help the economy.  Goolsbee said, "The President’s open to all different ways to boost competitiveness.  The President’s focus is how do we win the future and how do we get the economy growing?"  Goolsbee also said that the US  corporate tax code is full of "a lot of loopholes and carve-outs" and that President Obama "would be open to broadening the base and lowering the rate to make American companies that are competing with companies from abroad more competitive."

BAUCUS, REID INTRODUCE BILL TO REPEAL SECTION 1099 REPORTING REQUIREMENTS:  Senate Finance Committee Chairman Max Baucus and Senate Majority Leader Harry Reid introduced a bill today that would repeal requirements for businesses to report payments made for goods and certain services to the IRS using tax form 1099.   The senators said that they hoped to pass the bill with bipartisan support.

TAX BILL INTRODUCED JANUARY 24TH:
H.R.404:  To amend the Internal Revenue Code of 1986 to extend and modify the credits for alcohol used as a fuel, and for other purposes. 
Sponsor:  Rep Fortenberry, Jeff [NE-1] (introduced 1/24/2011)    Cosponsors (None)

INTERNAL REVENUE SERVICE - CIRCULAR 230 DISCLOSURE:
As provided for in Treasury regulations, advice (if any) relating to federal taxes that is contained in this communication (including attachments) is not intended or written to be used, and cannot be used, for the purpose of (1) avoiding penalties under the Internal Revenue Code or (2) promoting, marketing or recommending to another party any plan or arrangement addressed herein.

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