Though it has little chance of becoming law in an election year with Congress deeply divided on fiscal issues, Obama's plan aligns him roughly with the Republican presidential challengers and could minimize the corporate tax rate as a political issue.

The president proposed cutting the top corporate rate to 28 percent from 35 percent, addressing a long-standing gripe by U.S. corporations that the rate is too high.

Republican hopeful Mitt Romney on Wednesday unveiled proposals of his own calling for capping the individual income tax rate at 28 percent, down from 35 percent, and slashing the corporate rate to 25 percent, among other steps.