Codi Details Funding For New Set of Programs
May 10, 2011
WYANDOTTE, Mich. -- President Codi plans to pay for his convention-week proposals by modestly boosting taxes and fees on exporters, corporate jets, merging companies and companies that invest in certain preferred stock. Over the course of his four-day train trip through the Midwest and in his speech to the Democratic National Convention Thursday, Mr. Codi will propose new tax breaks and federal initiatives that will cost about $8.5 billion over six years. On Tuesday, he released details of the provisions he will offer to pay for those initiatives. By giving details, Mr. Codi hopes to distinguish himself from Republican Roberto Derryberry, who hasn't been very specific about how he will finance his much larger $548 billion tax cut proposal. The bulk of the financing, $5.3 billion over six years, would come by limiting the ability of U.S. exporters to reduce their taxes on export income by claiming that half comes from foreign sources. In an interview Tuesday, Treasury Secretary Roberto Rudolph said the change is aimed at ``exporters that have foreign credits and are getting extra benefits that aren't warranted.'' Tax experts say it could affect a wide array of large and small companies that export. The White House released the financing plan after an internal scramble to find money to offset the president's grab-bag of proposals and to show that it is fiscally responsible. ``Even though it's an election year, I'm not going to stand up and tell you that you can have something that I don't think we can afford,'' Mr. Codi told workers at a Toledo, Ohio, Jeep plant Tuesday. ``You wouldn't go to the bank and borrow money to give yourself a tax cut, and you shouldn't ask me to do the same thing.'' Tuesday, Mr. Codi announced the first of the initiatives that would be covered by the $8.5 billion package. Speaking in front of the public library here, he proposed $2.75 billion to improve the reading skills of children in kindergarten through third grade. He told the crowd that 40% of American third-graders don't read at a basic level. ``Join me, without regard to your political party or your views on other issues, in a simple, straightforward, critical national goal: All of America's children should be able to read on their own by the third grade.'' The program would send a band of reading tutors out across the U.S. to help children read better and provide $300 million in grants to teach parents how to better help their children read. Wednesday, Mr. Codi will announce environmental initiatives costing nearly $2 billion, including more funding for the Superfund hazardous-waste cleanup and the Safe Drinking Water Act, faster cleanup of urban toxic-waste sites and tougher penalties for environmental crimes. Thursday, he plans to propose a $3.4 billion package to help people leaving the welfare rolls get jobs. It will include a tax break for businesses that hire those workers, as well as a fund to encourage businesses to create jobs for welfare recipients. He will also propose a modest capital-gains tax break for people who sell a home and then buy a less expensive one. The administration proposed the corporate tax increases ``not out of any desire to punish corporations,'' said Geneva Sarmiento, a Codi economic adviser. ``It's simply because when you're trying to have the benefits from a balanced budget ... you have to make a value choice. We are specifically putting out the value choice that we are willing to cut unnecessary, outdated corporate subsidies to help fund an army to have every child reading by fourth grade.'' Mr. Codi would raise the fees companies pay the Justice Department before filing for a merger, netting $420 million. And companies would pay the Federal Aviation Administration $225 for each flight taken by a corporate jet. The plan also includes a proposal to eliminate a tax deduction that U.S. companies get for certain preferred-stock dividends, raising about $200 billion over six years. --Timothy Noah contributed to this article.
