–Throws Cold Water On Repatriation Proposal
–‘Best Thing’ Is For ‘Comprehensive Reform’ Of Corporate Taxes
–Should Lower Corporate Rate, Broaden Tax Base
By John Shaw
WASHINGTON (MNI) – Treasury Secretary Tim Geithner said Wednesday
the Obama administration “would not support” repatriation legislation
“outside the context” of comprehensive corporate tax reform.
In comments before the Senate Finance Committee, Geithner said the
“best thing” for Congress is to work on “comprehensive corporate tax
reform” which lowers corporate rates and broadens the tax base.
When pressed on the idea of stand-alone repatriation legislation,
Geithner said the administration would be “happy to consider it,” but
only as part of a comprehensive tax package.
Last year, the Senate rejected an amendment that would have allowed
multinational corporations a one-time tax break to bring earnings from
foreign subsidiaries back to the U.S.
Under the proposal by Democratic senator Barbara Boxer and
Republican senator John Ensign, the tax rate for companies bringing
foreign subsidiary earnings back to the U.S. would have been slashed
from the current rate of 35% to 5%.
Some in the business community are trying to revive the idea, but
Geithner made it clear the administration believes Congress should work
with it on overhauling the corporate tax code. He said that the high
corporate tax rate is a “problem” for American firms.
During a Tuesday hearing before the House Ways and Means Committee,
Geithner spoke repeatedly about wanting to work with both members of
parties in Congress to overhaul corporate taxes.
“Let’s see if we can do corporate tax reform,” he said as the
Tuesday session ended.
He said the plan must be revenue neutral and should focus on
lowering corporate rates by scaling back exemptions and credits in the
code. He said it should be possible to “lower rates very substantially”
but declined to back a specific number.
** Market News International Washington Bureau: (202) 371-2121 **
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