Obama vows tougher overseas tax policies

By Caren Bohan and Kim Dixon

WASHINGTON (Reuters) - President Barack Obama vowed on Monday to overhaul tax policies that he said reward companies for shifting U.S. jobs overseas and allow wealthy people to evade taxes using offshore accounts.

The White House estimated the plan would save $210 billion (140 billion pounds) over the next decade.

In one proposal businesses are poised to fight, Obama would tighten tax-code provisions that allow firms to defer paying taxes on profits they make overseas as long as those earnings are ploughed back into the foreign subsidiaries.

That portion of his plan has drawn opposition from big multinational firms such as Pfizer and Oracle.

The president said he also would close loopholes and bolster enforcement to prevent tax avoidance by companies and individuals.

"The steps I am announcing today will help us deal with some of the more egregious examples of what is wrong with our tax code," Obama said at a joint announcement with Treasury Secretary Timothy Geithner.

"It is the downpayment on the larger tax reform we need to make our tax system simpler and fairer and more efficient for individuals and corporations."

The proposals must go through Congress. Several lawmakers, including U.S. House of Representatives Ways and Means Chairman Charles Rangel, signalled support for Obama's proposals. But one crucial player, Senator Max Baucus, Democratic chairman of the Senate Finance Committee, called for more study of how U.S. businesses would be affected.