U.S. President Barack Obama is set to offer a plan Tuesday to cut corporate tax rates in exchange for new job programs.
The American leader and his political opponents in Congress have been stymied in efforts to craft a "grand bargain" to overhaul the government's complex tax laws for businesses and individuals, while cutting spending to rein in growth of the country's long-term debt.
But Obama, in a speech at a giant product distribution center for retailer Amazon.com in Tennessee, hopes to end the stalemate by focusing only on corporate tax changes and linking them to creation of more middle-class jobs.
The U.S. has some of the world's highest business tax rates. A White House aide said Mr. Obama will advocate trimming the corporate tax rate from 35 to 28 percent, with an even lower 25 percent rate for manufacturers. In exchange, the aide said Obama wants to end a variety of current corporate tax breaks.
The tax changes, including a fee on U.S. corporate earnings in offshore accounts, would produce a one-time tax windfall that Obama wants to spend on job creation, such as construction work to fix the country's aging roads and bridges. Obama's aides did not say how big the windfall might be.
It is uncertain whether Obama, a Democrat in his second term as president, can reach agreement with Republican opponents who control the House of Representatives and have adamantly opposed his efforts to boost taxes on the wealthiest Americans.
The president has offered to trim spending on government health care plans for poor and older Americans, but he also says the country needs more tax revenue to fund programs to boost the slowly improving national economy and trim the government's chronic budget deficits.
In Washington, policy makers at the U.S. central bank, the Federal Reserve, are meeting. They are considering when they might begin to trim their $85-billion-a-month purchase of securities they have used to pump more money into the U.S. economy, the world's largest. They plan to announce any policy changes on Wednesday.