The President’s plan for corporate tax reform: Incomplete. TPC’s Howard Gleckman explains that while Obama’s budget renewed his call for cutting corporate tax rates, he again failed to show how he’d pay for most of the effort. He's budgeted $141 billion for corporate tax reform over 10 years, but that covers less than 3 percent of corporate revenues over the same time frame. Obama would leave most businesses, pass-through entities currently filing under the individual code, untouched by the rewrite. The President’s plan for international tax reform: Intriguing. Gleckman notes that Obama’s proposed one-time 14 percent tax on $2 trillion in un-repatriated foreign earnings of US-based multinationals and their subsidiaries would finance the Highway Trust Fund for only six years— too short a time frame for an ongoing need. Many businesses say the rate is too high. But Obama’s plan, which also includes  a 19 percent minimum tax on  multinationals’ future foreign earnings, is worth exploring. Some Republicans like the idea. Ways and Means Committee Chair Paul Ryan calls the international plan “constructive.” As for corporate taxation and “shipping jobs overseas”… Would the plan achieve another of Obama’s goals and create US jobs? The jury is still out, but maybe revenue is more important: “Employment is a macro issue; it’s not an issue of which particular company is investing where,” notes TPC’s Eric Toder. He thinks Obama’s proposals would probably have small effects on US jobs, though “it’s hard to know how it all balances out.” China is more interested in collecting tax revenue from foreign firms. Its State Administration of Taxation will be investigating how Chinese and foreign-owned firms are moving their money and allocating their costs among their Chinese operations and overseas businesses. China hopes to enhance collection of taxes under existing laws. Should a punishment be tax deductible? Like it or not, for businesses, it often is. Firms can’t deduct a criminal fine or penalty owed to the government, but can deduct payments that compensate victims or correct damages. Vermont’s Democratic Senator Pat Leahy introduced a bill to change this rule. Case in point: Auto manufacturer Hyundai could deduct as much as $73 million in punitive damages—awarded to the families of two teenagers killed in a car crash—as an ordinary business expense. The families who receive the damage award? They’d have to declare the award as taxable income. Want to know how local and state governments really came out of the Great Recession? TPC’s Tracy Gordon shares highlights from the latest Census of Governments. Bottom line: “Local governments not only suffered deep declines in their own tax revenues but they also faced steep cuts in state aid… These cuts were particularly tough for counties and school districts, which usually cannot hike fees and charges like cities… It remains to be seen whether state spending cuts will be sustained and how they will interact will increasingly popular state tax cuts.” On the Hill. The House Ways and Means Committee yesterday passed a measure to resurrect and make immortal six lapsed tax breaks that would help small businesses and people who make charitable contributions. Treasury Secretary Jack Lew defends the President’s budget to the Senate Finance Committee today. Next week, the panel will review some history in its hearing, “Getting to Yes on Tax Reform: What Lessons Can Congress Learn from the Tax Reform Act of 1986. Two key players in that effort, former Finance Committee Chair Bob Packwood and former Democratic senator Bill Bradley, will testify. Interested in subscribing to The Daily Deduction, the Urban-Brookings Tax Policy Center summary of the day’s tax news? Sign-up here for free access. If you’d like to tell us about a new research paper or have any comments about our new feature, write us at [email protected].