Treasury Secretary Timothy Geithner on Wednesday said the administration is receptive to relaxing the tax rates on American businesses looking to bring foreign earnings back to the United States, but made it clear that the White House won’t support any fast-track of the measure, a signature priority of many large firms that say a currency a repatriation mechanism would provide a massive influx of capital to the domestic economy.
But at a town hall event on jobs and the economy in Washington on Wednesday, Geithner said the administration isn’t interested in taking a piecemeal approach to the looming issue of corporate tax reform.
“We are not going to look at a repatriation holiday outside the context of comprehensive reform,” he said, though he called it a “very important issue.”
That news deals a blow to companies such as Cisco, which has lobbied for tax breaks for foreign-source income. Estimates have pegged Cisco’s foreign-source profits at around $30 billion — money CEO John Chambers has said could be largely returned to the U.S. economy if the tax laws were relaxed to lessen the repatriation penalty.
Geithner said that administration officials are currently working with House and Senate leaders of both parties to “shape consensus” on a broad reform of the corporate tax code, looking to lower overall rates, broaden the base of contributions and improve incentives for investments.
Much of that effort builds on the largely pro-business message President Obama presented in his State of the Union address last month. In the time since, administration officials have talked extensively about improving the partnership between the public and private sectors, and described policies to use the levers of government to create a climate favorable to private investment.