Obama vows tougher overseas tax policies

In addition, Obama would extend a research and experimentation tax credit that businesses have sought.

Drew Lyon, a tax expert at PriceWaterhouse Coopers, said the changes to the "deferral" provision would be sweeping, since half of multinationals firms' income is earned abroad.

"It's really hitting most Fortune 100 companies that depend to a great deal on growth of foreign markets for growing their total earnings," Lyon said.

U.S. officials said Obama's plans were balanced and would not put excessive burdens on firms. They said studies looking at effective tax rates -- the amount paid after deductions -- show the United States is in the middle range of other Group of Seven countries when it comes to corporate taxation.

"I think it's important ... that the American people and businesses understand that this is fairness, not something that will put them at a competitive disadvantage," White House spokesman Robert Gibbs said.

In addition to the changes to the deferral provisions, separate proposals in Obama's plan would raise $95 billion by cracking down on overseas tax havens. Such tax havens became a major topic at the April meeting in London of leaders of the Group of 20 major economies.

In one of the proposals to crack down on tax evasion, the administration would require financial institutions to share information with the Internal Revenue Service about its U.S. customers. Foreign institutions must sign up with the IRS to become "a qualified intermediary" or else face a presumption that they are helping individuals evade taxes.

Consumer advocates said the changes were long overdue fixes for tax abuses.

Swiss banking giant UBS AG acknowledged in February that it helped U.S. clients conceal assets from their government. It agreed to pay a $780 million fine and has since identified about 320 of its American clients.

(Additional reporting by Ross Colvin; Editing by Doina Chiacu and Bill Trott)