Barron’s D.C. man sees little chance for corporate tax deal

Those hoping for some type of compromise on federal corporate tax reform shouldn’t hold their breath. That’s the assessment of Barron’s “D.C. Current” columnist Jim McTague.

Post midterm election, President Obama, as well as the Republican leaders in the House and Senate, claim they’re seeking a rapprochement to end the political rancor that has ground the legislative branch’s law-making machinery to a virtual halt since 2011, to pass some major legislation—most importantly corporate tax reform. In fact, the very last act of the last congress—a pork-laden appropriations bill—was supposed to demonstrate that the Republicans are prepared to reset their relationship with the Democrats and compromise in order to get important legislative work done.

But the president, a man who chooses his words carefully, hasn’t indicated that he’s willing to horse-trade. His remarks during his final press conference of 2014, for instance, sounded like the same version of “my way or the highway” that he’s been singing since the Republicans took control of the House in 2011. The president wants the GOP to bend because he’s not going to abandon any of his left-leaning political principals.

Obama’s response to a reporter’s question about the prospects for corporate tax reform next year exposed this attitude. If the Republicans want a tax deal, then they’re going to have to pay for it by earmarking some new revenue for infrastructure projects, he said. …

… Republicans, however, are in no mood to bend on principle with taxes. In their mind, new revenue recovered from accounts overseas should be used to lower the corporate rate and make it among the most attractive in the world. That, in turn, would attract more foreign investment and create additional American jobs. Using the revenue for what amounts to a stimulus program would be a tax increase, in their book, and a waste of money, owing to the poor outcome of Obama’s infrastructure spending in 2009. If Obama makes corporate tax reform a take-it-or-leave-it proposition, the Republicans will leave it.