By Bernie Becker - 04/05/11 04:44 PM EDT
Treasury Secretary Timothy Geithner told lawmakers Tuesday that the administration is crafting a corporate tax reform plan that would eliminate some tax preferences in exchange for a lower corporate tax rate.
Geithner had previously said that he wants the administration and Congress to work together on overhauling the corporate tax code, but this appeared to be the first time he has mentioned an administration reform proposal.
The secretary did not go into much detail about the plan or when it would be released. But he did say he thought the proposal would help get the process moving in Congress and that the administration had been consulting with lawmakers on the tax-writing committees.
“I’m actually quite optimistic that we’re going to be able to start that process with a very strong pro-investment, pro-growth, pro-competitiveness proposal,” Geithner said, adding that the plan would be revenue-neutral.
Geithner’s statements come amid a flurry of action on the tax-reform front, which prominent policymakers on both sides have said should be examined.
The House GOP budget plan — crafted by Rep. Paul Ryan (R-Wis.), the chairman of the House Budget Committee — proposes reducing both the top corporate and individual tax rates to 25 percent. Rep. Dave Camp (R-Mich.), the chairman of the House Ways and Means Committee, also floated those figures in mid-March.
On Monday, Sens. Ron Wyden (D-Ore.) and Dan Coats (R-Ind.) introduced bipartisan legislation to comprehensively revamp the tax code.
Geithner, testifying before a Senate Appropriations subcommittee, suggested Tuesday that he thought the corporate tax code could be revamped before the individual one, a different approach from House Republicans and the Wyden-Coats bill.
The secretary also reiterated that the administration would be unwilling to examine a policy allowing multinationals to bring offshore profits into the United States at a reduced tax rate outside of broader corporate reform. Some lawmakers and a coalition of businesses have called for such a tax holiday in advance of tax reform.
“What we want to do is improve incentives for people investing more of those resources here in the United States,” Geithner said.
For their part, Camp and Sen. Orrin Hatch (R-Utah), the ranking member of the Senate Finance Committee, both praised the Ryan budget proposal for calling for major tax reform, which they said would help boost job creation.
“We must focus on getting Washington out of the way so employers can do what they do best — innovate and create jobs — and that starts with comprehensive tax reform,” Camp said in a statement.
“We know our tax code is too complex, threatens our ability to compete in the world, and needs to be overhauled,” Hatch said in his own statement.