Companies will scrutinize President Barack Obama’s 2012 budget proposal for changes that would affect income they earn overseas, the U.S. Chamber of Commerce’s chief tax counsel said.
“It’s very important to keep a keen eye” on those proposals as lawmakers consider corporate tax legislation, chamber official Caroline Harris said in an interview today on Bloomberg Television.
Obama’s first two budgets proposed limiting companies’ ability to defer taxation on profits earned overseas. The chamber and other business groups opposed those ideas, and Congress didn’t pass most of them.
The president’s new budget plan, to be released in February, will spell out whether the administration will pursue lowering corporate tax rates while eliminating deductions and credits. When Japan lowers its corporate rate as planned next year, the U.S. rate of 39.2 percent, including state and local taxes, will be the industrialized world’s highest levy on business profits.
“You need to do something to keep us competitive with countries like Japan,” Harris said. The administration and congressional negotiators must agree on broad principles and then work through the details, she said.
“I want to say I’m optimistic,” Harris said.