President Obama is set to announce support for lowering the corporate tax rate in his State of the Union address Tuesday, Senate Minority Leader Mitch McConnell said Sunday.
“I’m told he’s going to come out for lowering the corporate tax rate,” McConnell said on “Fox News Sunday.”
“We have the second highest corporate tax rate in the world right now. It’s not competitive; it doesn’t help us create American jobs in America,” McConnell said.
A White House spokeswoman did not respond late Sunday to a request for comment.
But McConnell’s disclosure is the first substantive detail about the president’s speech to emerge to date. Obama has been talking for days about his intent to improve the economy and create jobs, but has yet to provide any details on how he plans to do so.
Lowering the federal corporate tax from its current top rate of 35 percent would be a significant move to attract business investment in the U.S. But to date, lowering the corporate rate has been proposed only in the context of eliminating tax breaks and loopholes for business at the same time.
The president’s fiscal commission recommended lowering the corporate rate to between 26 and 28 percent, depending on how many tax exemptions and loopholes – commonly referred to as “tax expenditures” – were eliminated.
And conservatives have signed on to the idea of broad tax reform. House Ways and Means Committee Chairman Dave Camp, Michigan Republican, said last week he is in favor of ceasing to designate “congressionally blessed” companies.
Thomas Bell, chairman of the U.S. Chamber of Commerce, said that despite reluctance on the part of many member corporations who “have their own specific tax accoutrements that they love and want to hang on to,” the nation’s largest business lobby is backing broad based tax reform.
The government forgoes just over $1 trillion in revenues due to tax loopholes and deductions, according to Obama’s deficit commission.