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President Obama will propose reforming complex tax code and cutting loopholes.
President Obama will reveal a proposal to lower the corporate tax rate to 28 percent from 35, which is the highest in the world after Japan, the Associated Press reported.
The proposed reduction would be one part of a broader package of tax reforms that are unlikely to pass in an election year. Secretary of Treasury Timothy Geithner will announce the proposals, which have been “in the works” for two years, today, The New York Times wrote.
While the corporate tax is high in the United States, the complex tax code – rife with loopholes and exemptions and “widely derided as inefficient and anticompetitive” – means many corporations end up paying much less. Obama proposed an overhaul of the entire code and reduction of the number of loopholes.
Politico reports that loophole elimination and “creating a minimum rate on foreign earnings” would result in more tax money collected by the government. The paper said the proposals “will provide a campaign talking point for President Barack Obama.”
According to an official, the AP reported, the Obama plan will help US businesses, especially those who face strong international competition.