(Updates with comment from Weber in fourth paragraph and Obama quote in eighth paragraph.)
Jan. 25 (Bloomberg) -- President Barack Obama will propose an overhaul of the U.S. corporate tax system in February, said Gene Sperling, the White House’s director of the National Economic Council.
The proposal will be released at about the same time as the administration’s fiscal 2013 budget plan, which is scheduled to be sent to Congress on Feb. 13, Sperling told reporters on a conference call today. The administration isn’t releasing details of the proposal.
Obama has said the corporate rate should be lowered from the current maximum of 35 percent in a way that doesn’t add to the budget deficit. A corporate overhaul plan probably will encounter opposition in Congress, where Republicans have said a rewrite of corporate tax rules should be paired with changes in the tax system for individuals.
“I don’t think anything is going to happen this session,” said Neal Weber, a tax partner in the Washington office of Cherry Bekaert & Holland LLP. “People are going to posture during the next 10 months through the election.”
Obama might seek to raise revenue to pay for a reduction in the corporate rate by reviving calls to end tax breaks for oil and gas companies or corporate jets. Republicans have blocked such moves in Congress.
House Ways and Means Committee Chairman Dave Camp, a Michigan Republican, released the first part of his corporate tax overhaul in October. He said the corporate rate should be lowered to 25 percent and that 95 percent of profits earned offshore should be exempt from taxation in the U.S.
Obama is moving in the opposite direction. In his State of the Union address yesterday, the president pressed Congress to impose a minimum tax on overseas profits. Obama reiterated that message today in a speech at Conveyor Engineering & Manufacturing, a Cedar Rapids, Iowa, company that makes screw- type conveyors for moving materials.
“We’ve got to stop rewarding businesses that ship jobs overseas,” he said. “We need to make it easier for American businesses to do business here in America.”
--With assistance from Hans Nichols and Julianna Goldman in Washington. Editors: Jodi Schneider, Laurie Asseo
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