US Treasury Secretary Jack Lew: We have structure to get to 28% rate

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US Treasury Secretary Jack Lew: We have structure to get to 28% rate

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In remarks made at the Economic Club in Washington, DC yesterday, US Treasury Secretary Jack Lew said the US has the structure to get the corporate tax rate down to 28%.

Dismissing the chances of getting the corporate tax rate reduced to around the mid-20s, which is in line with the average rate in OECD member countries, Lew said "we have a structure to get to 28%".

Lew commented on the prospects for comprehensive tax reform during a speech which urged Congress to act quickly to raise the debt ceiling.

He said there is a need to have revenue agreements within a broader fiscal framework before tax reform can be successfully achieved.

"The president tried just a few weeks ago to breathe a little life into the tax reform debate by suggesting that we think about business tax reform first. Look, the challenge in doing comprehensive reform is it's tied up in the whole fiscal policy debate," said Lew. "We do not believe you can do all of tax reform - individual and business tax reform - unless you have an agreement on what your revenue is as part of a broader fiscal frame."

However, despite the difficulties being experienced and the lack of substantial progress to date, he maintained that there is still a way forward for reformers.

"We are happy to work on business tax reform that uses the one-time savings to help build a foundation for economic growth in this country. That leaves you paths that are still, I think, possible to cross," said Lew.

Max Baucus, chairman of the Senate Finance Committee, also talked down the likelihood of reaching a 25% corporate tax rate during the Simpler Taxes for America Tour, which he embarked upon alongside Dave Camp, chairman of the House Ways and Means Committee.

Baucus said: "To be honest, I think 25% is a bit of a stretch".

And while Lew said 28% is no easy task, he reiterated that the US has the structure to get there.

"It's very hard to get that rate even to 28%. There's a debate between folks as to whether you can get to 25. I have yet to see the ways to pay to get to 25, but we have a structure to get to 28," said Lew.

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