President Barack Obama on Wednesday revived a list of his favorite ideas for raising $580 billion in new U.S. tax revenues over 10 years from the wealthy that, while unpopular in Congress, could prove an opening gambit for a longer term tax overhaul.
While certain to not move forward en masse, some elements of the 2014 budget blueprint, including proposals to stop big corporations from skirting tax on foreign income, could gain traction as lawmakers consider a revamp of the tax code and face a deadline on the government's debt limit this summer.
"These are all opening bids in any potential grand bargain, so from that perspective they are important," said Chris Krueger, an analyst at Guggenheim Partners.
Obama's budget does not seek to raise individual tax rates as he has proposed in prior budgets, according to a White House document. For years, he sought to raise rates on household income above $250,000.
The bid revives Obama's offer last year to Republican House of Representatives Speaker John Boehner during the negotiations to avoid the so-called fiscal cliff of looming tax hikes and spending cuts.
Obama's budget proposal officially puts forward the idea of a new "Buffett tax," named for investor Warren Buffett, that phases in a minimum 30 percent tax rate on household income above $1 million.
The White House revived a long-running proposal to cap itemized deductions and exemptions among wealthier taxpayers - starting at household income of roughly $250,000.
The cap would apply to the same list of deductions proposed in years past, officials said. That includes the charitable tax break and the exemption for municipal bond interest.
The fiscal cliff deal raised rates for households earning more than $450,000 a year, from 35 percent to 39.6 percent.
Also in the budget is an end to the tax break for "carried interest" profits earned by fund managers like those who run private equity and other investment firms, officials said.
New tax ideas, which officials previewed last week, include boosting taxes on cigarettes and a new $3 million limit on tax-deferred individual retirement accounts.
CORPORATE BREAKS AGAIN A TARGET
Prominently featured in the budget are proposals to raise hundreds of billions of dollars from U.S. multinational corporations that avert tax on income held overseas. Obama seeks to raise about $157 billion over a decade with these measures, up about $10 billion from last year's budget.
Obama also sought more revenue than last year from curbing energy tax breaks, and proposed ending a tax advantage for corporate jets.
Michael Mundaca, Obama's top tax official in the Treasury Department during his first term, said a reprise of earlier proposals is not surprising.
"It doesn't mean the administration is not open to a deal," Mundaca, co-director of national tax at Ernst & Young, said before the budget came out. "It is just that they may not be going to negotiate through the budget."
The cuts to corporate breaks are counterbalanced by White House proposals to double a tax credit for small start-up companies and extend a popular business research and development tax credit. He also wants to expand a child care tax credit used by less wealthy individuals.
The president has backed cutting the top U.S. corporate tax rate to 28 percent from 35 percent, now the highest in the industrialized world.
Obama has said that he supports a full-scale revamp of the entire tax code, both individual and corporate, and a White House summary called the budget proposals a "down payment."
Top tax-writers in Congress also back a tax rewrite, but the process is fraught with disagreement over how to streamline the code and whether to raise new revenue in the process.