US wants lower taxes, fewer loopholes for companies

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US wants lower taxes, fewer loopholes for companies

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Sending a political message in an election year, President Barack Obama has proposed a sweeping overhaul of how US companies pay tax.

The top corporate rate would be slashed from 35 percent to 28 percent and even lower for manufacturers.

That would address US firms’ long-standing complaint about the rate being too high.

At the same time the White House wants to eliminate many deductions and legal loopholes that businesses use to reduce their taxes.

That is sure to be resisted by powerful corporate interests.

Treasury Secretary Timothy Geithner said: “The current tax code was written for a different economy, a different era.”

He plans to meet next week with members of the US Congress to try to win support for the plan. “This process will take some time. It will be politically contentious, some will say these proposals are too tough on business, others will say they are not tough enough,” Geithner said.

The changes are unlikely to come into force before November’s presidential and congressional elections.