FACTBOX-Corporate tax agenda draws fire from top U.S. Republican

Nov 30 (Reuters) - In a sign lawmakers may be getting down to details on fixing the tax code, a top U.S. Senate Republican on Friday criticized a Democratic proposal to repeal an accounting technique that lets manufacturers reduce their income taxes.

Known as "last-in, first-out" (LIFO) accounting, the technique is still used in the United States under its Generally Accepted Accounting Principles, but is banned by International Financial Reporting Standards in most other countries.

President Barack Obama has proposed repealing LIFO, which has to do with inventory valuation. Ending LIFO would raise an estimated $52.9 billion in new federal revenues over 10 years, according to the president's 2012 budget proposal.

Orrin Hatch, the Senate Finance Committee's top Republican, issued a statement saying that killing LIFO and forcing businesses to adopt "first-in, first-out" (FIFO) accounting rules, "would cripple their ability to hire and invest."

Obama has targeted a long list of corporate tax breaks for closure in the name of reducing the federal deficit, putting corporate lobbyists and their congressional allies on defense.

Here is a sampling of tax breaks in play both in the end-of-the-year "fiscal cliff" debate and beyond in 2013:

'FISCAL CLIFF' TAX BREAKS

A mix of business and individual tax breaks known as the "tax extenders" have mostly expired and need renewal by year's end so companies can prepare their taxes. Among the biggest:

* R&D CREDIT - Renewal of a credit for research and development. Popular with Democrats and Republicans, the credit is critical to software, drug and aerospace companies.

* OFFSHORE INTEREST - Renewal of a tax break allowing companies to avoid tax on interest income earned outside the United States. Has bipartisan support. Likely to be part of a bigger deal to extend expiring individual tax cuts.

* WIND ENERGY. Extension of a tax credit for wind energy. Has bipartisan support, but faces resistance from traditional power groups and some Republicans.

* BONUS DEPRECIATION - Tax break with bipartisan support that lets businesses immediately depreciate certain new capital and equipment investments. It, too, expires at end of the year.

OTHER TAX HOT SPOTS

Although technically not part of the "fiscal cliff," there are some evergreen "revenue raisers" that typically get thrown into the negotiating mix in end-of-the-year talks. They include:

* CARRIED INTEREST - Obama and many Democrats want to raise the tax rate paid by investment managers of private equity, venture capital and some real estate partnerships to the top income tax rate. They now enjoy the 15 percent capital gains rate on much of their earnings.

* OIL AND GAS SUBSIDIES - Democrats and a handful of Republicans want to repeal several energy industry tax benefits, including the oil and gas well depletion allowance; the domestic manufacturing deduction on oil and gas production; and expensing of intangible drilling costs.

* CORPORATE JETS - Obama has proposed the repeal of an accelerated depreciation tax break for corporate jet owners.

TAX REFORM ON THE HORIZON

The tax code is immense and overhauling it would put scores of corporate tax breaks in play. Obama has the most detailed plan so far. Republicans have offered up few specifics.

* LAST IN, FIRST OUT (LIFO) ACCOUNTING - Obama has proposed repealing this accounting technique, used in some industries, especially oil and gas. Companies say this change would force them to revalue old inventory to higher prices.

* CORPORATE TAX RATE - Obama agrees with much of the business community on one thing: the top 35-percent corporate tax rate should come down. Obama backs trimming it to 28 percent; many Republicans propose going down to 25 percent.

* MINIMUM OVERSEAS PROFITS TAX - The White House proposed a minimum tax on overseas profits, and using the revenues to help companies investing in the United States.

* PROFIT "DEFERRAL" - Obama proposed cutting off a deduction for interest expenses on foreign earnings for deferred taxes.

* FOREIGN TAX CREDIT POOLING - Obama proposed closing what critics call a loophole that lets companies claim more in tax credits than would be paid in U.S. taxes by manipulating which foreign subsidiaries pay out dividends.

* INTANGIBLE PROPERTY - Obama proposed closing a tax break that allows U.S. companies to shelter profits overseas from intangible property, such as royalties from a drug patent.

* DEDUCTIONS FOR MOVING EXPENSES - Obama proposed limiting a tax break for moving expenses when a U.S. company closes a plant and moves overseas. Obama would give a tax credit of 20 percent for the expense of moving operations back to the United States.

(Additional reporting by Kim Dixon, Patrick Temple-West; editing by Andrew Hay)