Geithner meets with corporate executives to discuss streamlining the tax system
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Kai Ryssdal: Treasury Secretary Timothy Geithner will meet today with corporate executives to talk about streamlining the tax system. It’s been 25 years since the last overhaul of the U.S. code. But some think the economy and the politics are finally aligned for another overhaul.
Our Washington Bureau Chief John Dimsdale joins us now live with more on this story. Good morning, John.
JOHN DIMSDALE: Good morning Jeremy.
HOBSON: Why do people think now is time for reform?
DIMSDALE: The sheer complexity is beginning to chase investment money out of the country. The U.S. has a very high corporate tax rate but industries have gotten Congress to approve so many deductions and exemptions that the effective rates are really quite competitive with other countries. The problem is you have to play the game. You have to hire lots of tax accountants and lobby in Congress for the tax breaks. The system has become so elaborate and difficult that businesses are no longer willing to play. So they take their money and look elsewhere.
HOBSON: What kind of reforms are being talked about?
DIMSDALE: First lower tax rates. And streamline them so there aren’t pages and pages of deductions and incentives. That should keep the government from losing revenue. The problem of course is that creates winners and losers according to Andy Laperriere at the International Strategy and Investment Group.
ANDY LAPERRIERE: When you start lowering rates and you take away deductions, manufacturers could be the losers and retail the winners. Or the other way around depending on what you do. There’s a lot of moving pieces and it depends on what pieces you decide to move around.
So Jeremy, the next step after today’s meeting at Treasury will be hearings in the House Ways and Means Committee and those start next Thursday.
HOBSON: Marketplace’s John Dimsdale in Washington, thanks.
DIMSDALE: You’re welcome.
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