President Obama's proposal to reform the corporate tax code is specifically designed to hit oil companies hard and benefit three economic endeavors the administration favors: manufacturing, clean energy and private-sector research and development.
"Our current corporate tax system is outdated, unfair, and inefficient," Obama said. "It's not right, and it needs to change."
Obama's election-year proposal, which is less generous to industry than proposals floated by his would-be Republican challengers, would cut the top tax rate paid by American companies to 28 percent, down from 35 percent, the highest rate in the industrialized world. The proposal would make up for lost revenue by slashing dozens of existing loopholes and tax breaks enjoyed from Wall Street to Main Street, raising an additional $250 billion over 10 years, according to senior administration officials.
"The U.S. would still be above the average world corporate tax rate, which is closer to 25 percent," said Brad Badertscher, of the University of Notre Dame's Mendoza College of Business. "Therefore it is unclear how this new proposal would allow U.S. firms to be more competitive."