House tax chief to press Geithner on corporate tax
By Kim Dixon
WASHINGTON, Dec 8 (Reuters) – The head of the tax-writing House of Representatives Ways and Means Committee will press Treasury Secretary Timothy Geithner this week to back a plan to cut corporate tax rates and pay for it by closing offshore tax loopholes.
“I’m going to try to persuade the secretary of the Treasury,” Rep. Charles Rangel told a group of senior tax executives from Fortune 500 companies gathered in Washington on Tuesday.
Rangel in 2007 introduced a bill that would cut the top corporate tax rate from 35 percent to about 30 percent, and pay for it by closing tax breaks companies get when they earn income abroad.
President Barack Obama has proposed many of the corporate tax loophole cuts backed by Rangel, but has not embraced cutting the corporate tax rate.
Rangel implored corporate executives to back the plan, despite having to give up some tax breaks.
“I wish these corporate executives would recognize …that if they ever really want to be competitive with the international community, if they want to get the corporate rates down … they have to help us to clean up the code.”
Debate over tax reform will heat up next year as individual tax cuts put in place by former President George W. Bush expire. A White House advisory panel, led by former Federal Reserve Chairman Paul Volcker, is preparing tax reform recommendations.
Bill Archer, a former Republican chairman of the Ways and Means Committee, who spoke with Rangel, said businesses worry that the offshore loopholes will be closed and the tax revenue generated will be diverted elsewhere.
“There is a great fear that the international provisions that raise revenue will be stripped off for other purposes and not be used to get the rate down,” Archer said.
Rangel acknowledged the fear.
“There has to be some confidence in the business sector if they are giving up something … they’ll be rewarded,” Rangel said.
Some Republicans have criticized Rangel, a Democrat, and demanded he be replaced as chairman of the powerful Ways and Means Committee.
Rangel is being investigated by two House subcommittees for unpaid taxes linked to his home in the Dominican Republic, for renting apartments in Harlem for thousands of dollars per month below market value, and for accepting travel to a conference in the Caribbean. Last year, Rangel acknowledged that he owed some $10,000 in back taxes for failing to report rental income from his property in the Dominican Republic.
(Reporting by Kim Dixon; editing by John Wallace) ((firstname.lastname@example.org; +1 202 354-5864; Reuters Messaging: email@example.com))