Besides affecting jobs, investments in the US in plant, equipment and property could fall by as much as $84.2 billion. Repealing or sharply limiting deferral would not generate large tax revenues, since substantial job losses, wage cuts and lower investments would reduce tax revenues, the report said.

On May 5, Obama had announced end to years of tax incentives to those companies which create jobs overseas in places like Bangalore. Instead the incentives would now go to those creating jobs inside the United States, in places like Buffalo city, bordering Canada in upstate New York.

"We will stop letting American companies that create jobs overseas take deductions on their expenses when they do not pay any American taxes on their profits," Obama said.