The new policy would target companies which store revenue in offshore bank accounts to avoid paying taxes, and would also go after wealthy individuals who do the same. Obama said current laws make it too easy for corporations to take advantage of "tax havens" abroad.

"It's a tax code full of corporate loopholes that make it perfectly legal for companies to avoid paying their fair share," Obama said.

"We are beginning to crack down on Americans who are bending or breaking the rules," he said.

The White House believes the tightening of corporate tax rules abroad will encourage more companies to keep jobs in the United States. The White House said that in 2004 - the last year with complete data - foreign earnings were reported at 700 billion dollars but only 16 billion dollars was collected in taxes.

The changes will likely place the Obama administration at odds with big business, and the president could face stiff resistance from members of Congress opposed to increased taxes.

The administration estimates the new rules, which would go in effect in 2011, will generate more than 210 billion dollars in government revenues over the next 10 years.

The plan would add 800 new agents to the Internal Revenue Service to monitor foreign bank accounts and ensure individuals and companies are not skirting taxes.

To placate business, the administration said it will seek to make permanent a business tax credit for research, which would cost the government about 75 billion dollars in lost revenue over the next decade.