President Obama proposed a major overhaul of the nation's corporate tax code on Wednesday, an election-year gambit that aims to draw a contrast over a key policy issue with the Republicans vying to replace him.
The plan would lower the nation's corporate tax rate to 28 percent. At the same time, Obama wants to boost overall revenue from corporate taxation by banning numerous deductions and loopholes that save companies tens of billions of dollars a year on their tax bills.
The current U.S. corporate tax rate of 35 percent is one of the highest in the world, but the abundance of loopholes and deductions enable many businesses to pay far less than that — or nothing at all. Companies in the United States pay almost half the taxes that companies in other rich countries pay, compared with the size of the economy, according to the Organization for Economic Cooperation and Development.
The president's plan targets oil and gas companies for tax increases while promising special breaks for manufacturing companies.
And in a slap at U.S. multinational corporations that shelter profits overseas, Obama wants those firms to pay a minimum tax on their foreign earnings. He also wants to end tax breaks for companies that outsource and give new tax incentives to firms that move jobs back home.
Marguerite Higgins of the conservative Heritage Foundation argued that such a tax would hurt competition.
"Once again, Obama is going in precisely the wrong direction," Higgins said in a statement. "Rather than in-sourcing jobs, he would outsource the headquarters and top management of U.S. multinational companies."
The prognosis for the overhaul plan in Congress is unclear. Many Republicans, including the leading presidential candidates, have favored reducing taxes on businesses well below what the president is proposing.
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