Hard to evaluate tax reforms

If parts of President Barack Obama’s State of the Union address sounded familiar, it’s not your imagination.

Among the goals Obama set forth in 2011’s speech were eliminating oil company subsidies, tackling immigration reform and changing the tax code.

Twelve months later, he’s talking about many of the same things.

Let’s focus on one area where – on the surface – there seems to be agreement: reforming the tax code and getting rid of “loopholes”; more specifically, encouraging companies to create jobs in the United States and changing rules that, in effect, reward companies for moving jobs and profits overseas.

If all sides agree, why hasn’t more been done?

It’s partly political, partly practical.

One person’s “loophole” is another person’s essential tax break. The well-used phrase “the devil is in the details” is tailor-made for talking about tax code reform.

Nevertheless, we encourage Obama and members of both parties in Congress to seek a middle ground. Incremental progress is better than no progress at all.

We can’t think of anyone in Congress who would disagree with Obama’s statement that “no American company should be able to avoid paying its fair share of taxes by moving jobs and profits overseas.”

However, more details are needed on how he proposes implementing his idea that “every multinational company should have to pay a basic minimum tax.”

Likewise, details are needed on what he would change to eliminate the tax advantages of outsourcing jobs to another country.

Some of the details are likely to come out in his budget address in mid-February.

Obama is counting on the savings or increased revenue from the “basic minimum tax” and other changes to pay for his other idea: giving bigger tax cuts to high-tech manufacturers that make products in the United States and giving financial assistance for new plants, equipment and worker training in communities that are suffering because a factory left town.

Obama and his fellow Democrats should provide details of how they would accomplish these goals.

Republicans in Congress also should present a detailed plan of how they would accomplish the same goals; they shouldn’t just criticize Obama’s plan.