In a broad overhaul of the corporate tax rate, President Obama has announced a plan to reduce the Corporate tax rate to 28% while eliminating many of the loopholes and other breaks for corporations.

Obama’s proposal would decrease the effective tax rate to 25%, down from a present level of 32%.

As he said in his address last month, Obama would like to see a reduction in relocation of jobs overseas, to that end, he proposes a minimum tax rate for multinational companies based in the United States.

A hard battle is expected to be waged by trade groups and insdustry lobbyists as efforts to close lucretive loopholes moves forward. Gas and Oil companies are expected to take huge hits as the administration attempts to eliminate tax breaks that are widely seen as unneeded because of the huge profits being realized by that industry.

House Republicans would like to see the rate dropped to 25%, but want the overhaul to be revenue neutral. The idea here is to reduce the tax rate but eliminate loopholes so that corporations do not pay more taxes as a result. Democrats would like to see the tax break as well, but would like to see a tax rate higher than 25% with the elimination of a host of tax breaks. They would like the savings go to reduce the deficit rather than cutting government programs.

With 2012 being and election year, congress would face many difficulties with such sweeping legislation. But, with many of the present breaks expiring later this year, Congress will probably come back after elections in November to look at the cuts again.