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

Bernie Sanders Surge Reflects US Shift on Socialism

Although most analysts say it is unlikely he will get the Democratic nomination, Sanders' campaign opens up questions and issues that are otherwise marginalized More

Crowdfunding Helps Save Neil Armstrong's Spacesuit

Smithsonian turns to Kickstarter to raise more than $700,000 to help preserve the spacesuit worn by the first man to walk on the moon More

Video On IS Frontline, Kurdish Fighters Ready for Offensive

Peshmerga soldiers say although they need more heavy artillery, they are poised to take the fight to the Islamic State extremists on their turf More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Drowned Migrant Toddler Photo Triggers European Outragei
X
Henry Ridgwell
September 04, 2015 11:36 AM
The harrowing picture of a drowned three-year-old Syrian boy washed up on a Turkish beach appears to have galvanized Europe’s leaders into doing more to address the refugee crisis. France, Germany and Italy issued a joint call Thursday for compulsory quotas of refugees for all EU states. But there were chaotic scenes in Hungary as police tried to force migrants off a train heading for Austria. Henry Ridgwell has more. And a caution, some of the images in this report may be disturbing.
Video

Video Drowned Migrant Toddler Photo Triggers European Outrage

The harrowing picture of a drowned three-year-old Syrian boy washed up on a Turkish beach appears to have galvanized Europe’s leaders into doing more to address the refugee crisis. France, Germany and Italy issued a joint call Thursday for compulsory quotas of refugees for all EU states. But there were chaotic scenes in Hungary as police tried to force migrants off a train heading for Austria. Henry Ridgwell has more. And a caution, some of the images in this report may be disturbing.
Video

Video Russians Observe 11th Anniversary of Beslan School Attack

This week, Russians have been observing the 11th anniversary of the attack by Islamic militants on a school in Russia's North Caucasus region that killed more than 330 hostages, including 186 children. The three-day siege and massacre that started on September 1, 2004 took place in Beslan, a town in the republic of North Ossetia, and is one of the bloodiest terrorist acts ever in Russia. VOA's Mike Richman reports.
Video

Video Native Americans Debate: Father Serra, Saint or Sinner?

Pope Francis will canonize an 18th century missionary to Spanish California during a papal visit to the United States this month.  But some Native Americans have criticized the elevation to sainthood of the missionary priest, Junipero Serra. VOA's Mike O’Sullivan has more from Los Angeles.
Video

Video Calais School Offers Another Face of Europe’s Migrant Crisis

Europe is facing mounting criticism over how it’s handling its biggest migration crisis since World War II. But not all Europeans believe building walls or passing repressive policies are the answer. A school for migrants in the French port city of Calais, is opening doors and building bonds across nationalities. VOA's Lisa Bryant reports.
Video

Video Kurdish Fighters on IS Frontline Ready for Offensive

Finger on the trigger, the Kurdish Peshmerga soldier stared across the dust at a village taken over by Islamic State extremists. The Kurdistan’s Khazir frontline, just 45 minutes from the Islamic State stronghold of Mosul. And at this point, the militants were less than two kilometers away. VOA's Sharon Behn reports.
Video

Video China Announces Troop Cuts at WWII Parade

Chinese President Xi Jinping Thursday announced plans to cut the world’s largest military force by 300,000 troops. The announcement was made during a massive military parade to commemorate victory over Japan in World War II. The event was shunned by most Western leaders and for some is raising fresh concerns about China’s military ambitions. VOA’s Bill Ide has more from Beijing.
Video

Video Russia-Japan Relations Cool as Putin Visits China for WWII Anniversary

Russian President Vladimir Putin is in Beijing for commemorations of the 70th anniversary of China's WWII victory over Japan. Putin is expected to visit Japan later this year, but tensions between Tokyo and Moscow over islands disputed since the war, and sanctions over Ukraine, could pour cold water on the plan. VOA's Daniel Schearf reports.
Video

Video Yemen ‘on Brink of Disaster’ as Medical Shortages Soar

Aid agencies warn Yemen is on the brink of humanitarian disaster – with up to half a million children facing severe malnutrition, and hospitals running out of basic medicines. There are fears Yemen's civil war could escalate as the coalition led by Saudi Arabia tries to drive back Houthi rebels, who seized control of much of the country earlier this year. Henry Ridgwell reports.
Video

Video Apps Helping Kenyan Businesses Stay Ahead of Counterfeiters

Counterfeit goods in Kenya cost the government as much as $1 billion each year in lost tax revenues. The fake goods also hurt entrepreneurs who find it hard to carve out a niche in the market and retain customers. But as Lenny Ruvaga reports from Nairobi, information technology is being used to try to beat the problem.
Video

Video Nobel Prize Winner Malala Talks to VOA

Nobel Peace Prize winner Malala Yousafzai met with VOA's Deewa service in Washington Sunday to talk about women’s rights and unveil a trailer for her new documentary. VOA's Katherine Gypson has more.
Video

Video War, Drought Threaten Iraq's Marshlands

Iraq's southern wetlands are in crisis. These areas are the spawning ground for Gulf fisheries, a resting place for migrating wildfowl, and source of livelihood for fishermen and herders. Faith Lapidus has more.
Video

Video Colombians Flee Venezuela as Border Crisis Escalates

Hundreds of Colombians have fled Venezuela since last week, amid an escalating border crisis between the two countries. Last week, Venezuelan President Nicolas Maduro ordered the closure of a key border crossing after smugglers injured three Venezuelan soldiers and a civilian. The president also ordered the deportation of Colombians who are in Venezuela illegally. Zlatica Hoke reports.
Video

Video Rebuilding New Orleans' Music Scene

Ten years after Hurricane Katrina inundated New Orleans, threatening to wash away its vibrant musical heritage along with its neighborhoods, the beat goes on. As Bronwyn Benito and Faith Lapidus report, a Musicians' Village is preserving the city's unique sound.
Video

Video In Russia, Auto Industry in Tailspin

Industry insiders say country relies too heavily on imports as inflation cuts too many consumers out of the market. Daniel Schearf has more from Moscow.
Video

Video Scientist Calls Use of Fetal Tissue in Medical Research Essential

An anti-abortion group responsible for secret recordings of workers at a women's health care organization claims the workers shown are offering baby parts for sale, a charge the organization strongly denies. While the selling of fetal tissue is against the law in the United States, abortion and the use of donated fetal tissue for medical research are both legal. VOA’s Julie Taboh reports.

VOA Blogs