President Barack Obama last night in his State of the Union address to Congress called for both corporate and individual tax reform, but did not offer specific proposals or a timeline for action. The Administration may offer more details on its approach to tax reform when President Obama sends his FY 2012 budget to Congress the week of February 14. President Obama noted that many U.S. companies are "hit with one of the highest corporate tax rates in the world," but also asserted that some have "rigged the tax code" and "end up paying no tax at all."
President Obama reaffirmed past Administration statements that corporate tax reform should not add to the federal deficit. He stated that Congress should remove "loopholes" and eliminate provisions that "benefit particular companies and industries" and "use the savings to lower the corporate tax rate for the first time in 25 years." Treasury Secretary Timothy Geithner and other Administration officials recently have stated that the Administration would support corporate tax reform under which base-broadening provisions would offset the cost of reducing the current 35-percent statutory corporate tax rate.