Daily Tax Update - July 30, 2013: President Proposes Corporate Tax Cut for Jobs Program

President Proposes Corporate Tax Cut for Jobs Program:  Today, in a speech, President Obama asked Republicans to support lower corporate tax rates and increased infrastructure spending as part of a “grand bargain for middle-class jobs.”  The President said his plan would cut the corporate tax rate from 35% to 28%, with a preferred rate of 25% for manufacturers, and also allow small businesses to write off $1 million in investments.  The plan also proposes a “minimum tax” on foreign earnings.

The President said, “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.”  The President added, “If folks in Washington want a ‘grand bargain,’ how about a grand bargain for middle-class jobs?”

According to the White House fact sheet, “Today, the President is calling for a pro-growth tax reform and jobs package that would be fully offset using one-time revenues raised as we transition to a new business tax system.  The transition revenue would support much-needed investments such as modernizing our infrastructure; creating new manufacturing hubs; and training our workers with the skills they need for the jobs of today and tomorrow.  At the same time, President Obama remains committed to pursuing a long-term deficit reduction deal that includes revenue-raising individual tax reform and a balanced approach to replacing the damaging sequester.”

In a joint statement, House Ways and Means Chairaman Dave Camp and Senate Finance Chairman Max Baucus said, "We welcome the President’s recognition that our broken, outdated tax code is making it harder for U.S. companies to compete and American families to get ahead.  Making the tax code simpler and fairer by closing loopholes and lowering rates for families and employers of all sizes will strengthen our economy, while creating more jobs and higher wages.  We look forward to continuing to work with the Administration as well as our colleagues in the House and Senate to simplify the tax code and lower rates for all families and businesses."

The fact sheet can be accessed here.

Miscellaneous Guidance Released:
Announcement 2013-37 extends to January 31, 2014, the deadline to submit on-cycle applications for opinion and advisory letters for sponsors and practitioners maintaining defined benefit mass submitter lead plans for the plans’ second six-year remedial amendment cycle.