Will propose new incentives for corporations
President Obama will call for an overhaul of business taxes today, part of his latest focus on job creation. Administration officials say the proposal will come during Obama's visit to an Amazon shipping facility in Chattanooga, Tennessee; he'll argue that Washington has been so bogged down in partisan fighting over the budget and other matters that it has lost sight of the need to help working-class Americans.
Officials say Obama seeks to change tax laws that would enable companies to bring home an estimated $2 trillion earned abroad - with the caveat that some of it be spent on training workers and infrastructure improvements.
Obama has proposed helping corporations bring foreign earmings home before; in February 2012, he proposed cutting the top corporate rate for most companies from 35% to 28%; in return for lower rates certain tax loopholes and deductions would be eliminated. The President has also floated cutting the tax rate for manufacturers to 25% and making a research-and-development tax credit permanent.
Companies based in the United States currently pay a U.S. tax rate of 35% on all income they earn around the world. But they get tax credits for payments to foreign governments and don’t owe the U.S. unless they bring those profits back to the U.S.