THE USA President has finally woken up to the manipulation rampant in the system of corporate taxes and the need to overhaul the tax code.

In a state of the Union address 2011, President Barrack Obama stated that “Over the years, a parade of lobbyists had rigged the tax code to benefit particular companies and industries. Those with accountants or lawyers to work the system could end up paying no taxes at all. But all the rest were hit with one of the highest corporate tax rates in the world.”

This could be the precursor to an overhaul of America’s tax code. However, economists and lawmakers do not expect this to be completed in this year due to the complexity of the subject and the approach of the season for presidential election later this year.

There is a need for simplification of corporate tax rates, which could result in lower tax rates for corporates as well as reduction or removal of deductions. For a long time now, Republicans had agreed to cooperate and work with the Democrats in a effort to simplify taxes.

In December last year, the National Commission on Fiscal Responsibility and Reform had released its final report that identified simplification of the tax code as pivotal to addressing the significant fiscal challenges facing the country. According to the report, by lowering corporate and individual tax rates and reducing deductions, government revenues could increase and the tax system could be made simpler. A reduction in fiscal deficit could also be brought out through simplification of the tax structure.