WASHINGTON - The Obama administration will propose lowering the current 35 percent corporate tax rate, while eliminating loopholes and subsidies and imposing a minimum tax on the overseas profits of American companies.
Administration officials said the Treasury Department on will detail aspects today of President Obama’s proposed overhaul of the corporate tax system, a plan he broadly outlined in his State of the Union speech last month.
The 35 percent nominal corporate tax rate is the highest in the world after Japan. But deductions, credits, and exemptions allow many corporations to pay much less. The administration plan is unlikely to go as far as a House Republican proposal to lower the rate to 25 percent. But Treasury Secretary Timothy Geithner told a House committee last week that the administration wants to create more incentives for corporations to invest in the United States.
Obama has said corporate tax rates are too high and has proposed eliminating tax breaks for American companies that move jobs and profits overseas. He has also proposed giving tax breaks to US manufacturers, to firms that return jobs to this country, and to companies that relocate to some communities that have lost big employers.
White House economic adviser Gene Sperling has said the administration also is seeking 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.