President Barack Obama wants to cut the corporate tax rate from 35 percent to 28 percent, and end loopholes that he says give businesses incentive to move jobs overseas.
Announcing part of his plan Wednesday, Obama called the current tax code outdated, unfair and inefficient.
"It's not right and it needs to change," he said.
Obama added that his plan is, "A framework that lowers the corporate tax rate and broadens the tax base in order to increase competitiveness for companies across the nation."
The president's proposal includes:
- Cutting special tax loopholes for industries.
- Providing tax incentives to encourage manufacturing in America.
- Cutting taxes on investments by small businesses.
- Reducing tax deductions that encourage companies to send money out of the U.S.
The president's plan is not as ambitious as a House Republican proposal that would lower the corporate rate to 25 percent.
Meanwhile, Republican presidential candidate Mitt Romney introduced his tax reform plan if elected.
He criticized parts of President Obama's corporate tax plan, saying it would eliminate certain tax benefits that help job growth.
The former Massachusetts governor said he would call for a 20 percent cut in personal income taxes.
Romney's plan would then set a permanent cap on the corporate tax rate at 28 percent.
The across-the-board cuts would also extend to people in every tax bracket.