Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

Obama: Close tax loopholes to juice economy

obama_090910.gi.top.jpgPresident Obama delivered remarks on the economy and a proposed business tax cut on September 8, 2010 in Parma, Ohio. By Jennifer Liberto, senior writer


WASHINGTON (CNNMoney.com) -- As President Obama pushes a new campaign to juice up the economy, he's starting to fill in the details of how he would pay the estimated $180 billion tab. His plan: Eliminate some corporate tax breaks and subsidies, and close loopholes.

"For years, our tax code has actually given billions of dollars in tax breaks that encourage companies to create jobs and profits in other countries. I want to change that," Obama said in his speech in Cleveland on Wednesday.

If Congress were to pass new economic recovery measures, it could pay for them by raising some $300 billion in new revenue by closing "tax loopholes," according to White House economist Jason Furman.

With Americans nearly as concerned about rising deficits as they are the lackluster economy, the president and lawmakers recognize that any new policy initiatives must be funded.

The White House has yet to specify exactly which corporate tax breaks would be on the chopping block, beyond saying that oil and gas companies will be first up. But Furman pointed to billions of dollars worth of tax loopholes that the administration has previously identified in budget proposals that Congress has yet to enact.

Here are two examples from the White House's proposed 2011 budget, as noted by Anne Mathias of Concept Capital's Washington Research Group:

* Limiting the amount of interest that can be deducted by U.S. subsidiaries of companies that have moved overseas. That could raise $1.7 billion.

* Repealing a manufacturing tax deduction that large global oil and gas firms get. That could raise $15 billion.

The problem is, many of these money-raisers have already been thrown on the table and presented to Congress, which hasn't done much with them. Also, every targeted tax break has a company behind it with a swarm of hired lobbyists poised to defend it.

Congress has already passed legislation to close some international tax loopholes, but White House officials still think there's more left to tackle. A 150-page report from the Treasury Department details the laundry list of tax changes the White House is pushing for.

Figuring out how to pay for the package will be key to congressional passage. Several Republicans -- plus one Democrat, Sen. Mary Landrieu of Louisiana -- have already come out swinging and said they don't want raise taxes on the oil and gas industry.

"While these tax increases may be politically popular in some areas of the country, they have a disproportionately negative effect on working families in the Gulf Coast where much of the industry is located," Landrieu spokesman Aaron Saunders said. "Sen. Landrieu fully supports getting America's economy back on track but feels that it should not be done at the expense of the Gulf Coast." To top of page

Index Last Change % Change
Dow 17,689.86 -56.12 -0.32%
Nasdaq 5,128.28 -0.50 -0.01%
S&P 500 2,103.84 -4.79 -0.23%
Treasuries 2.20 -0.06 -2.78%
Data as of 6:48am ET
Company Price Change % Change
Bank of America Corp... 17.88 -0.25 -1.38%
Micron Technology In... 18.51 -1.39 -6.98%
Facebook Inc 94.01 -1.20 -1.26%
Apple Inc 121.30 -1.07 -0.87%
Frontier Communicati... 4.72 0.09 1.94%
Data as of Jul 31
Sponsors

Sections

Some families are outraged at the sums they've been offered by Lufthansa as compensation for the Germanwings plane crash in March which killed 150 people. More

Fast-food chains that operate in more than 30 locations nationwide are the sole target of a new rule in New York to hike their minimum wage to $15. But consumers and small business owners, as well as some employees, may be the ones to pay the price. More

You can't blame it on the economy anymore. More Millennials now have jobs, but are still living at home. More