News / USA

Lew, US Republicans Agree on Need for Tax Overhaul

U.S. Treasury Secretary Jack Lew testifies on Capitol Hill in Washington, April 11, 2013.
U.S. Treasury Secretary Jack Lew testifies on Capitol Hill in Washington, April 11, 2013.
Reuters
U.S. Treasury Secretary Jack Lew and Republican lawmakers concurred on Thursday that overhauls of the corporate and individual tax codes should be tackled together, but their agreement ended there.

Diverging sharply on whether new federal revenues should be raised from the affluent, Lew and the Republicans left prospects for comprehensive tax reform cloudy amid persistent partisan conflict on Capitol Hill over tax-and-spending policy.

A day after the White House released a 2014 budget plan it hoped could spark a deal with Congress on cutting deficits and changing the tax code, Lew testified before the House of Representatives' tax-law writing Ways and Means Committee.

Democratic President Barack Obama last year proposed a revamp of the business tax code alone, but Republicans said corporate and individual taxes must be reformed in unison. Lew assured Republicans that Obama agreed with that strategy.

"Just intellectually, one has to look at it as a whole," he said.

Obama called for $580 billion in new revenue from the wealthy in his 2014 budget on Wednesday, including a new minimum tax and curbs to deductions.

Most Republicans criticized the budget as too reliant on raising taxes and inadequate in cutting spending.

Republican Representative Dave Camp, the chairman of the committee, said the tax code should lower rates for all Americans instead of bringing more money into Washington.

"This budget is a first step, but America can do better than what the president is proposing here," he said.

Lew said any agreement must include new revenue.

In his confirmation hearing in February, Lew called tax reform a top priority. Formerly a two-time budget director and Obama's chief of staff, Lew helped pass the nation's last major tax overhaul in 1986 as a congressional staff member.

At a breakfast earlier on Thursday, Camp praised Obama, saying he has "evolved" by explicitly pledging not to raise total corporate taxes as part of a tax overhaul.

Prior budgets had been unclear on that point, and the business community was worried that corporate tax breaks would be trimmed to help curb deficits.

Democratic congressman Jim McDermott complained that Obama kept offering Republicans compromises, such as the White House proposal to change the inflation adjustment for Social Security, but Republicans gave nothing in return.

"The president continues to reach out and Republicans say, 'Yeah we'll take that, but we don't want to take any of the balance that has to go along with it,' " McDermott said, referring to revenue.

Lew also said the administration is willing to talk to Republicans about moving to a territorial tax system, which would largely exempt big companies' foreign income from taxation. But Lew said protections would be vital to prevent companies from moving domestic profits offshore.

Both parties are also largely opposed to a tax on financialtransactions, a popular idea in Europe to make banks pay for the help they got during the financial crisis. Lew on Thursday repeated the Obama administration's opposition to that tax.

Debt Bargaining

Lew also repeated the White House was opposed to using the nation's debt limit as a bargaining chip for fiscal policy.

Republicans have previously balked at raising the debt ceiling without an agreement on further government spending cuts, and are likely to revive the issue this summer after the current suspension of the debt limit expires on May 19.

Once the United States breaches its debt limit, the government would no longer be able to borrow money and make certain payments - though the Treasury can use emergency cash measures to push off the day of reckoning into July.

Some Republicans have proposed legislation to prioritize U.S. payments on government bonds if the United States hits its debt limit in order to avoid a credit default. The moves show their willingness for further brinkmanship.

"There's no way you can choose about paying your bills without being in default on one or another obligation," Lew said.

You May Like

Kurdish Party Pushes Political Gamble to Run in Turkey Poll

HDP announces it will run as political party instead of fielding independent candidates in June election, but faces tough 10 percent threshold More

Twitter Targets Islamic State

New research shows suspending Twitter accounts of Islamic State, its supporters has been effective; group, its backers are facing 'significant pressure,' says terrorism expert More

Video Former Sudan 'Lost Boy' Becomes Chess Master in NYC

Majur Juac made the leap from being a refugee in Africa to a master chess champion in US, where he shares his expertise with students More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Super Bowl Ads Compete for Eyes on TV, Webi
X
January 29, 2015 9:58 AM
Super Bowl Sunday (Feb. 1) is about more than just the NFL's American football championship and big parties to watch the game. Viewers also tune in for the world famous commercials that send Facebook and Twitter abuzz. Daniela Schrier reports on the social media rewards for America’s priciest advertising.
Video

Video Super Bowl Ads Compete for Eyes on TV, Web

Super Bowl Sunday (Feb. 1) is about more than just the NFL's American football championship and big parties to watch the game. Viewers also tune in for the world famous commercials that send Facebook and Twitter abuzz. Daniela Schrier reports on the social media rewards for America’s priciest advertising.
Video

Video Theologians Cast Doubt on Morality of Drone Strikes

In 2006, stirred by photos of U.S. soldiers mistreating Iraqi prisoners, a group of American faith leaders and academics launched the National Religious Campaign Against Torture. It played an important role in getting Congress to investigate, and the president to ban, torture. VOA's Jerome Socolovsky reports.
Video

Video Freedom on Decline Worldwide, Report Says

The state of global freedom declined for the ninth consecutive year in 2014, according to global watchdog Freedom House's annual report released Wednesday. VOA's William Gallo has more.
Video

Video As Ground Shifts, Obama Reviews Middle East Strategy

The death of Saudi Arabia’s king, the collapse of a U.S.-friendly government in Yemen and a problematic relationship with Israel’s leadership are presenting a new set of complications for the Obama administration and its Middle East policy. Not only is the U.S. leader dealing with adversaries in Iran, the Islamic State and al-Qaida, but he is now juggling trouble with traditional allies, as White House correspondent Luis Ramirez reports.
Video

Video MRI Seems to Help Diagnose Prostate Cancer, Preliminary Study Shows

Just as with mammography used to detect breast cancer, there's a lot of controversy about tests used to diagnose prostate cancer. Fortunately, a new study shows doctors may now have a more reliable way to diagnose prostate cancer for high risk patients. More from VOA's Carol Pearson.
Video

Video Smartphones About to Make Leap, Carry Basic Senses

Long distance communication contains mostly sounds and pictures. For now. But scientists in Britain say they are close to creating additions for our smartphones that will make it possible to send taste, smell and even a basic touch. VOA’s George Putic reports.
Video

Video NASA Monitors Earth’s Vital Signs From Space

The U.S. space agency, NASA, is wrapping up its busiest 12-month period in more than a decade, with three missions launched in 2014 and two this month, one in early January and the fifth scheduled for January 29. As VOA’s Rosanne Skirble reports, the instruments being lifted into orbit are focused on Earth’s vital life support systems and how they are responding to a warmer planet.
Video

Video Saved By a Mistake - an Auschwitz Survivor's Story

Dagmar Lieblova was 14 when she arrived at Auschwitz in December 1943, along with her entire Czech Jewish family. All of them were to die there, but she was able to leave after several months due to a bureaucratic mix-up which saved her life. Now 85, with three children and six grandchildren, she says she has a feeling of victory. This report by Ahmad Wadiei and Farin Assemi, of RFE/RL's Radio Farda is narrated by RFE’s Raymond Furlong.

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More

All About America

AppleAndroid