Today the White House and the Department of Treasury issued a joint report on the President’s Framework for Business Tax Reform. The report is at http://www.treasury.gov/resource-center/tax-policy/Documents/The-Presidents-Framework-for-Business-Tax-Reform-02-22-2012.pdf.

This report outlines what the President believes should be five key elements of business tax reform: eliminate tax loopholes and subsidies, broaden the base and cut the corporate tax rate to spur growth; strengthen manufacturing and innovation; strengthen the international tax system to encourage domestic investment; simplify and cut taxes for small businesses; and restore fiscal responsibility.

According to the report, the President’s Framework would reduce the corporate tax rate from 35 percent to 28 percent, noting however that at least several considerations relating to the corporate tax base (such as reforming depreciation schedules and limiting deductibility of interest) would be necessary for implementing the reduction. The Framework would also effectively cut the top corporate tax rate on manufacturing income to 25 percent or an even lower rate by reforming the domestic production activities deduction, and would expand, simplify and make permanent the Research and Experimentation tax credit; allow small businesses to expense up to $1 million in investments; and double the amount of deductible start-up expenses from $5,000 to $10,000. On the other hand, some of the other notable proposals in the Framework include imposing minimum tax on overseas profits, taxing carried interest as ordinary income, and eliminating certain temporary business tax provisions that have been deficit-financed.