Today, Treasury Secretary Jacob Lew testified before the Senate Finance Committee on the President’s Fiscal Year 2015 budget plan.
In his opening remarks, Chairman Ron Wyden said, “Now back on the domestic front, the committee has before it several issues with a date stamp on them. Those issues include repealing and replacing the badly-flawed Medicare payment system for doctors, enacting bipartisan tax reforms that make the tax code more fair and more pro-growth, shoring up our transportation system, and helping American workers compete in tough global markets.” Wyden added, “Whether it’s through the tax code or other action, investment in innovation and research can help turn creative startups into thriving businesses with more good-paying, high skill jobs. That’s why I plan to move quickly to extend a number of expired tax provisions such as the Research and Development credit. Over the long term, that credit, through comprehensive tax reform, could be made even more useful for American startups. The Obama administration’s budget includes a proposal for business tax reform. I believe a broader approach that comprehensively overhauls our broken, dysfunctional code would do more to give all Americans – especially in the middle class – the opportunity to get ahead. And we’re going to work in a bipartisan way and with the Administration closely on that matter.”
In his testimony, Secretary Lew stated, “The proposals in the President’s Budget aim for balance to achieve long-run fiscal responsibility while promoting economic recovery and growth by eliminating waste, investing in the future, and reforming certain mandatory programs. The Budget calls for business tax reform that will make our companies more competitive but that will be revenue neutral in the long run. It introduces a plan to repair our existing infrastructure and expand it to support our economy for the next generation. The Budget increases the resources we are putting toward national security both at home and abroad because economic prosperity and fiscal responsibility cannot come at the expense of our safety. The Budget also proposes initiatives to improve early childhood education and skills training because investing in our nation’s human capital will provide the best long-run return for the economy.”
On the issue of tax reform, Lew said, “The tax code should encourage public confidence and provide a simple level foundation for economic growth. However, over time, it has become unnecessarily complicated and a burden on the economy. Comprehensive tax reform holds the promise of improving economic growth by reducing complexity for individuals and small businesses, by curbing inefficient tax subsidies that distort individual and business decision-making, and by reducing the deficit. While the Administration’s position is that tax reform should raise revenue, unfortunately, there is not agreement in Congress on whether tax reform should raise revenue or be revenue neutral. The President’s Budget, however, builds on the bipartisan support for business tax reform. In February 2012, the President provided a framework for how business tax reform could be achieved. The Budget uses that framework to simplify and strengthen tax incentives for research and clean energy, to begin closing loopholes and eliminating special-interest subsidies, and to begin reforming the international tax system. The proposals would prevent U.S. companies from shifting profits overseas and prevent foreign companies in the U.S. from avoiding taxes that they owe. These proposals are part of a comprehensive—and long-run revenue neutral—business tax reform plan that would also cut the marginal tax rates for businesses.”
In remarks today on tax reform, House Ways and Means Chairman Dave Camp said that he intends to hold a public hearing at some point on his comprehensive tax reform draft. However, Camp said that he does not plan to release another revised draft. Camp said, “'Discussion draft' is not to say I want to change it."
Testimony can be accessed via: