The budget plan, which notes that comprehensive tax reform is a “daunting task” that can take several years, also calls for paying for a three-year patch in the alternative minimum tax with a wholesale 30 percent decrease in itemized deductions for the wealthiest. It reiterates the president’s declaration that an overhaul of the tax code should be revenue-neutral as well.
Generally speaking, the White House described the need for tax reform in much the same manner as other Democrats and Republicans in Washington, asserting that a host of deductions and credits have hurt American businesses’ ability to compete internationally.
But the president’s declaration that tax reform not add “a dime to our deficit” also puts him somewhat in the middle in the discussion of how much revenue a tax code overhaul should collect. Obama’s debt commission had envisioned reforming the tax code in a way that would help bring down the deficit, while some Republicans and business-friendly groups have argued that a reform package should not be concerned, at least at first, with breaking even on revenue.
Officials on both sides of the aisle have acknowledged that reforming the tax code would be a tough lift, especially in the months leading up to a presidential election.
And the Obama budget in some ways underscores that challenge. Both sides have looked at tax reform as a possible area of bipartisan cooperation, but Republicans wasted little time in blasting the White House budget’s tax proposals, including the roll back of the Bush tax cuts for the wealthy.