WASHINGTON, May 4 (Reuters) - Multinational companies on Monday said President Barack Obama's proposals to rein in corporate loopholes will make them less competitive, while consumer advocates said the changes are long overdue fixes for abuse.
Obama, carrying out a campaign promise, plans to raise $210 billion over a decade by revising a tax policy that lets global companies defer income earned abroad, and by closing a loophole administration officials say lets companies hide income from foreign subsidiaries.
A broad swath of companies -- from banking institutions and hedge funds to pharmaceutical and technology companies -- will be impacted by the changes, experts said.
"It's really hitting most Fortune 100 companies that depend to a great deal on growth of foreign markets for growing their total earnings," said Drew Lyon, a principal at PricewaterhouseCoopers' Washington office who advises Fortune 500 companies on tax policy.
About half of multinationals companies' income is earned abroad, he said.
One proposed change, which will raise about half of the $210 billion, requires companies that defer income earned abroad to also defer deductions associated with that income.
That change is not as broad as one advocated by U.S. House of Representatives Ways and Means Chairman Charles Rangel advocated in 2007, Chamber of Commerce tax counsel Caroline Harris said.
"It is a bit narrower because you can still take deductions for research and development," Harris said. "But it's still not good."
Global companies say they are subject to two layers of taxation because most other industrialized countries do not tax foreign income of their native companies.
But companies get tax credits to offset that policy, according to Robert McIntyre of the Center for Tax Justice.
Another proposal would reform the so-called "check the box" provision in the tax code that the administration says allows companies to hide foreign subsidiaries by shifting the income to tax havens.
"This is absolutely huge," McIntyre said. "It has allowed an incredible amount of corporate sheltering."
The administration says this change would raise $86 billion over 10 years.
Obama will roll out his ideas in an announcement at 11:05 a.m. EDT (1505 GMT), where he will be joined by Treasury Secretary Timothy Geithner. (Editing by Maureen Bavdek)
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