Obama’s plan would eliminate dozens of tax subsidies and loopholes for certain industries including oil and gas companies in order to lower the overall corporate tax rate from 35 percent to 28 percent; reduce the effective rate on manufacturing to no more than 25 percent, down from about 32 percent, and encourage greater research and development as well as the production of clean energy; provide incentives to encourage companies to create and build things in America; create a new minimum tax on foreign earnings; and simplify and reduce the tax burden for small businesses – all without adding a dime to future deficits, Geithner said.
The proposal will kick-start the process of fundamental tax reform and begin the process of building bipartisan consensus, Geithner said, acknowledging that it will take time and be politically contentious as “many will fight to preserve special tax preferences and subsidies.”
Administration officials have in recent days spoken with congressional leaders – Senator Max Baucus, a Democrat from Montana and chairman of the Senate Finance Committee; Senator Orrin Hatch, a Republican from Utah and Finance Committee ranking member; Dave Camp, a Michigan Republican and chairman of the House Ways and Means committee; and Sander Levin, a Michigan congressman and ranking Democrat on the House Ways and Means committee -- who are expected to begin meeting next week on how to move forward, Geithner said.
