Obama said he wants US firms to remain most competitive in the world. "But the way to make sure that happens is not to reward our companies for moving jobs off our shores or transferring profits to overseas tax havens," he argued.

The Congress is now considering legislation that would sharply limit the "deferral" rules that protect US businesses from bearing much higher tax burdens on their earnings abroad than their foreign competitors in the same markets.

"The current proposal to restrict 'deferral' would end up reducing US jobs and investment and could impair our economic recovery," said Shapiro, who has advised US President Bill Clinton and British Prime Ministers Tony Blair and Gordon Brown as well as other leaders and private companies.

"The Obama Administration deserves credit for many initiatives to promote investment and innovation," said Bruce Mehlman, executive director of the TCC, a group made up of high-tech CEOs focused on policies that strengthen American competitiveness.

"But we cannot expect to lead the world in high-tech by marrying the world's best innovation infrastructure with the world's most confiscatory corporate tax structure," Mehlman argued.

The report suggested that the administration and the Congress should conduct a serious review of the tax code and identify broad reforms that take account of the actual dynamics of the global economy and the need to support the integrated operations and international competitiveness of American companies.

Meanwhile, The Hill – a newspaper from the Capitol – reported that these companies have intensified their lobbying against such a tax provision among the US lawmakers.

... contd.