WASHINGTON -- The White House will propose lowering the current 35 percent corporate tax rate, while at the same time eliminating loopholes and subsidies and imposing a minimum tax on the overseas profits of U.S. companies.
Administration officials said the Treasury Department will detail aspects today of President Barack Obama's proposed overhaul of the corporate tax system, a plan he broadly outlined 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 taxes at a lower rate.
The administration plan is not likely 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 U.S.
"We want to bring down the rate, and we think we can, to a level that's closer to the average of that of our major competitors," Geithner told the House Ways and Means Committee.
Treasury will offer broad principles of its plans but will not offer specific legislation, the administration officials said, speaking on condition of anonymity to describe what the White House will do. As a result, the administration's plan will serve more as a marker in a debate that most expect will extend throughout this year's presidential election with little to no chance of enactment.
While providing no specifics, Obama has said corporate tax rates are too high and has proposed eliminating tax breaks for U.S. companies that move jobs and profits overseas. He has also proposed giving tax breaks to U.S. manufacturers, to firms that return jobs to this country and to companies that relocate to some communities that have lost big employers.