President Barack Obama wants to cut the corporate tax rate by seven percentage points but the move doesn’t mean companies would pay less taxes.
His plan also eliminates many loopholes and subsidies that corporations currently use to pay far less taxes and could result in a higher — not lower — final payments to Uncle Sam.
The White House is targeting companies that move jobs and operations overseas while providing relief for companies who keep jobs at home.
While both political parties support — in principle — revamping tax laws, Obama’s proposal will undoubtedly face opposition from Republican who tend to favor protecting corporate interests.
“Republicans will protect their big business buddies,” political consultant Katherine Browne tells Capitol Hill Blue. “They won’t support a plan that makes it easier for corporations to avoid paying their fair share of taxes.”
Capitol Hill watchers give Obama’s plan little chance for success in Congress, particularly in a campaign year.
Treasury Secretary Tim Geithner is expected to release details of the plan — which lowers the corporate tax rate from 35 to 28 percent — Wednesday.