Obama's 'A list' tax plans

Treasury 'Green Book' spells out more details on administration's tax proposals. Months of back and forth with Congress to come.

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By Jeanne Sahadi, CNNMoney.com senior writer

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NEW YORK (CNNMoney.com) -- President Obama on Monday revealed more details of his myriad tax proposals -- and added a few new ones along the way.

In the past few months, the administration has proposed many revenue raisers but left tax experts guessing as to the specifics.

Thanks to the release of the Treasury's "Green Book," they now have more answers ... and more proposals to analyze. From very technical changes on estate and gift taxes to some new ones on international taxes, Obama has added a host of new measures to his tax roster.

"They're putting in enough provisions to get to the revenue gains they originally estimated," said Roberton Williams, senior fellow at the Tax Policy Center.

Who is high-income? Among the details that tax experts had been looking for was how the administration would determine who qualifies as "high-income." Obama has said he would restore the two top tax rates to 36% and 39.6% for families making more than $250,000 and individuals making more than $200,000.

Until Monday the administration hadn't specified whether it would use use adjusted gross income or taxable income, which comes after all deductions and credits. The answer is somewhere in between, and as a result a small number of high-income families won't be hit with higher rates.

Rather than consider AGI, the administration will consider a household to be high income if it meets the income thresholds after taking the standard deduction plus two personal exemptions for couples or one personal exemption for single filers.

How to value a gift? On the gift and estate tax front, a new provision would require the reported value of a gift to be the same as the value declared when the recipient sells the gift and must declare capital gains or losses for income tax purposes.

Say a parent with a $1 million business gives equal shares to each of his three children. For gift and estate tax purposes, the value of the gift isn't 33% per child, but something less because no one child has control over the company. That reduces the gift tax liability.

But when the children go to sell the company, they may declare that their basis was 33% per person, which would decrease their capital gains tax liability. Under Obama's proposal they would have to report the same basis in both instances.

On the business front. The biggest guessing game among experts about corporate taxes was how the administration would raise $210 billion over 10 years by closing corporate tax loopholes.

The answer is a number of previously unannounced loophole closers in addition to what the administration revealed last week.

"It seems they've rounded up every international tax increase proposal ... but they've failed to address the [issue of lowering] the corporate tax rate," said Clint Stretch, managing principal for tax policy at Deloitte Tax.

Among the additions is a proposal to place limits on companies' abilities to shift income through so-called intangible property transfers to other countries.

Others boost reporting requirements, such as one that would make the IRS more aware of when there are discrepancies between what a company reports for tax purposes and what it reports on its books.

Another will hold both a company that leases out employees to a firm and the firm itself liable if the leased workers' employer taxes aren't paid. The government essentially would say "we don't care who pays them but if you don't we'll hold you both liable," Stretch said.

There are a number of industry-specific proposals that Obama is making as well, particularly for financial products companies, insurance companies, paper companies and oil and gas producers.

No one expects all of the administration's tax proposals to go through. Far from it. As it is, lawmakers have already indicated they're not on board with a number of the revenue raisers that Obama has proposed.

But "this sets a marker," Stretch said. "It makes the A-list of things to talk about and then the conversation becomes 'What should we do instead?' " To top of page

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