Susan Walsh, AP
In this Feb. 2, 2012 file photo, President Barack Obama speaks in Washington.

The Obama administration on Wednesday proposed an overhaul of the corporate tax system in the U.S. by lowering the rate from 35 percent to 28 percent and eliminating loopholes, according to the Wall Street Journal.

The plan would make the corporate tax rate even less for manufacturers and would abolish many tax deductions, the Treasury Department told the Wall Street Journal. But President Obama's plan aims for tax increases for oil and gas companies.

The current corporate tax rate of 35 percent in the U.S. is one of the highest in the industrialized world, the Organization for Economic Cooperation and Development told the Washington Post. Many companies pay much less than that or nothing at all because of the various loopholes and deductions in the current system. As a result, businesses in the U.S. pay about half the taxes companies in other wealthy countries pay, compared with the size of the economy.

Presidential hopeful Mitt Romney has called for a 25 percent corporate tax rate and fewer loopholes, according to the Washington Post. Romney plans to speak about tax reform later in the week.

Democrats and Republicans have been in favor of a corporate tax overhaul that would flatten rates and get rid of loopholes, according to the Washington Post. It is not yet clear what Congress's exact plan will be for restructuring the tax code.

Not all companies would benefit from Obama's tax plan. Drug, Internet and biotech companies would pay much higher taxes than they do under the current tax system, according to Fox Business.

An analysis of tax data from 2009, compiled by New York University and reprinted by the New York Times, shows that the bigger an industry's effective tax rate, the more that industry would benefit from lowering and flattening the tax code for businesses, Fox News analyst James Farrell told Fox Business.

On the other hand, the lower the effective tax rate, the more a company would benefit from deductions and the more that industry would be hurt by a flatter corporate tax code with fewer deductions, according to Fox Business.

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