(Reuters) - The Obama administration will propose slashing the top income tax rate for corporations to 28 percent from the current 35 percent, as part of a corporate tax reform plan that is set to be announced on Wednesday, the Wall Street Journal said.
The new tax proposal would also aim to raise overall tax revenue by eliminating dozens of popular deductions in an effort to restructure the corporate tax code, the Journal said.
The new tax proposal would lower the “effective” tax rate on manufacturers to “no more than 25 percent,” a senior administration official told the newspaper.
The plan would also require U.S. companies operating overseas to pay for the first time a minimum tax rate on their foreign earnings, according to the Journal.
The new tax plan would raise an additional $250 billion in taxes over 10 years to offset or eliminate many temporary deductions, credits and other measures that are extended every year, such as a research and experiment tax credit, a senior administration official told WSJ.
Obama last week unveiled a $3.8 trillion budget-and-tax proposal that called for aggressive government spending to boost the economy and for higher taxes on the rich.
Treasury Secretary Timothy Geithner had told a Senate committee last week that “dozens and dozens” of tax loopholes were being targeted for closure, but that some tax incentives would be kept for “creating and building stuff in the United States.”
The Treasury department could not immediately be reached for comment by Reuters outside regular U.S. business hours.
Reporting by Sakthi Prasad and Rachelle Younglai; Editing by Muralikumar Anantharaman