Obama Administration to unveil corporate tax reform
Wednesday, February 22, 2012
The Obama administration plans to unveil a long-awaited corporate tax reform plan on Wednesday, lowering the top income-tax rate for corporations to 28 percent from 35 percent while eliminating deductions.
Corporations with overseas operations would also face a minimum tax on their foreign earnings, new tax benefits would be given to incentivize U.S. manufacturers while taxes on oil and gas companies would reportedly see their taxes go up while losing many large deductions and subsidies.
The plan aims to raise $250 billion over 10 years.
"Our tax system should not give companies an incentive to locate production overseas or engage in accounting games to shift profits abroad, eroding the U.S. tax base. Introducing the principle of a minimum tax on foreign earnings would help address these problems and discourage a global race to the bottom in tax rates," reads an outline provided by a senior administration official
The outline says the manufacturing deduction -- emphasizing clean energy research and development -- would reduce the effective rate on manufacturing to no more than 25 percent.
Senior administration officials told Fox News the announcement, to be held at the Treasury Department, fills in details of the tax reform outline Obama gave during his State of the Union address.
The president said at the time he wants to lower the overall corporate tax rate "for the first time in 25 years." The U.S. corporate rate of 35 percent is one of the highest in the world.
The White House is calling for more "fairness" and "simplicity" in the system, and in a bid to move companies back to the U.S., it would seek a minimum tax on global profits. Currently, many corporations do not invest overseas profits in the United States to avoid the 35 percent tax rate.