Barack Obama has proposed slashing the US corporate tax rate from 35 per cent to 28 per cent in a move that could determine where global companies choose to invest.
The administration’s plan would make the US a more attractive location for manufacturing and research, while imposing a minimum tax on profits US companies earn in offshore tax havens. It could also hit oil and gas companies by closing loopholes that lower their tax rate. “Our current corporate tax system is outdated, unfair and inefficient. It provides tax breaks for moving jobs and profits overseas and hits companies that choose to stay in America with one of the highest tax rates in the world,” Mr Barack said. “It’s not right and it needs to change.”
Reforming the bafflingly complicated US tax system has support across the political spectrum in the US. Mitt Romney, the frontrunner for the Republican presidential nomination, also revealed his tax reform plans yesterday, announcing a new personal income tax plan that would cut all six of the current marginal rates by 20 per cent. The new rates would range between 8 and 28 per cent.