President Barack Obama proposed raising about $100 billion in revenue over the next decade through new taxes and restrictions on U.S. multinational companies.
The changes, included in his budget plan for fiscal 2015, would affect digital goods, deductions for “excessive” interest and so-called hybrid arrangements that can lead to income that isn’t taxed in any country, according to the budget. Obama also wants to make it tougher for U.S.-based companies to move to other countries.
The Treasury Department will release further details of the proposals later Tuesday.
In all, the budget plan seeks to raise $276 billion over the next decade from international tax changes — 75 percent more than was sought in last year’s proposal.
Obama wants to dedicate the revenue to lowering the corporate tax rate to 28 percent from 35 percent.
Obama’s budget and specific tax proposals are unlikely to advance in Congress this year. Lawmakers are deadlocked on tax policy, largely because of a partisan dispute over whether high- income individuals should pay more taxes.
Representative Dave Camp, chairman of the House Ways and Means Committee, released a proposed revamp of the tax code last week that also would alter taxes on the foreign income of U.S. multinationals.
Like Obama, Camp seeks to make it harder for U.S. companies to shift profits to low-tax countries. Unlike Obama’s plan, Camp’s proposal wouldn’t tax many offshore profits and would make it easier for companies to bring such profits home without an additional layer of taxation.
The tax portion of Obama’s budget plan would expand the earned income tax credit for low-income workers, exclude Pell grants from income and establish automatic enrollment in individual retirement accounts.
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