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White House to Yahoo Finance: ‘We’ve done our part’ on corporate tax reform

There is a pair of issues on which both Republicans and Democrats agree in theory: corporate tax reform and infrastructure investment. But despite that tacit agreement, it seems unlikely that there will be any meaningful movement on either one in the near future. Why? Because no one actually believes corporate America will go for the proposed reforms, and that means America’s crumbling infrastructure likely will have to wait for another source of funding.

The United States has the highest corporate tax among the OECD countries at 35%. (Ireland is the lowest at 12.5%.) President Obama has proposed a one-time lower rate for any U.S. multinational that agrees to repatriate profits currently held overseas and therefore not subject to U.S. corporate income tax.

U.S. multinationals, including General Electric (GE), Apple (AAPL), Microsoft (MSFT), IBM (IBM) and others have roughly $2 trillion in profits held overseas.

The President’s proposal would invest those repatriated funds in rebuilding infrastructure. In general terms, Republicans are largely supportive of infrastructure investment, but likely would find some disagreement on the finer points of how to fund it.

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Where corporate tax reform is concerned, all parties, including businesses, are likely to differ on the finer points.

Shaun Donovan, President Obama’s Director of The Office of Management and Budget, spoke with Yahoo Finance at the Milken Global Conference in Los Angeles and acknowledged the challenges ahead. “What’s hard is that when you actually start to make those changes there’s some company somewhere benefiting from that tax break,” says Donovan. “So what it’s going to take is a larger sense, maybe a sense of patriotism, a sense of ‘we’ve got to do something right for the country even if that means I may lose this particular tax break or that one.’”

In a recent interview with Bloomberg, House Speaker John Boehner said he gives a corporate tax overhaul a 50-50 chance of happening, citing the challenge of dealing with all the small businesses that file taxes as S corporations and partnerships.

Asked whether President Obama is willing to spend some political capital and make a concerted push for corporate tax reform, Donovan says, “We’ve done our part.” He says there are other priorities on the “front burner” for now, but tax reform could come more to the forefront later in the year.

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