Obama to announce new overseas tax proposals

President Barack Obama is set to announce new tax proposals that will help raise billions in new tax revenue by changing tax policies for US firms that earn profits in countries with low tax rates.

White House expects the new international tax policy and enforcement proposals to help raise over $210 billion in the next decade.

The plan, to be announced by the White House later today, would do away with some tax deductions for companies with overseas operations, reports quoted to administration officials familiar with the plan as saying.

Under the new tax proposals, the government would alter provisions that allow companies to defer paying taxes on profits earned overseas. Companies would still be allowed to defer payment of taxes but they would not be allowed to take deductions on expenses for overseas operations as per the current law.

This is part of the US government's larger plan to keep jobs at home, although it may make US companies less competitive overseas, according to officials.

The Obama administration is aiming at the large, multinational firms that don't pay taxes to the US on par with their real earnings and offshore jobs. The new policy is also aimed at some wealthy individuals who also try to avid paying taxes.

While those who use offshore tax havens such as the Bahamas or Cayman Islands as well as corporations that have international divisions may oppose the Obama proposal, ordinary Americans who pay their share of taxes, may not disagree.