The President’s annual State of the Union speech is traditionally more than just a memo of the past or a blueprint for the future.

Particularly in an election year, it’s a campaign document, and yet it does show where the administration is placing its priorities. When fleshed out by the budget proposal a few weeks from now, it will indicate what the thinking is on the legislative proposals likely to be made during the year.

The subject of taxes came up numerous times during the speech. Tax breaks for companies that outsource jobs overseas, the tuition tax credit, the R&D credit, and tax relief for small business all had their moments, as well as a call for an extension of the payroll tax cut.

The President called for change in the Tax Code, but with a caveat. “Tax reform should follow the Buffett rule: If you make more than $1 million a year, you should not pay less than 30 percent of taxes,” he said.

There weren’t many surprises in the address, according to American Institute of CPAs vice president of taxation Edward Karl.

“Most of it was pretty much expected. At the end of the day, everything you see is political and economic posturing,” he said. “It will be very difficult to have any significant legislation in a Presidential election year.”

“One item that has to be dealt with is the payroll tax cut,” Karl said. “It will take place in the next couple of weeks. When they came up with the temporary cut, the decision was left with conferees of the Joint Committee of Taxation to come up with a solution.”

The conferees are not limited to simply discussing the payroll tax cut, observed Karl.

“The last time they talked about this in December, there was some discussion of extenders. I suspect there will be more discussion, but actually doing something about it will be difficult because of the cost,” he said.

There will also be discussion about the AMT, he suggested. “In the past, Congress has dealt with the extension of the AMT exemption level outside of the normal pay-for rules. There is fairly consistent agreement on both sides of the aisle that it has to be done.”

The conferees’ discussions could include both the 2011 extenders and the AMT, but not the 2012 extenders, which include the Bush tax cuts and the estate tax. “With the election ahead, these will get pushed off until 2013,” Karl said.

“There continues to be a lot of interest in spurring the manufacturing business in the U.S. A lot of credits were mentioned, and there has been discussion about revising the corporate and international rules to a territorial system,” he said.

“There’s no likelihood of a value-added tax this year, but if the President wins re-election there will be increased discussion. Actual passage is a different story, but the discussions will pick up.”