Cooperation Needed on US Tax Reforms

November 10, 2011 Taxation in USA

Secretary Timothy F. Geithner,  John PodestaWASHINGTON D.C. – The US Treasury Secretary is calling for national politicians to cooperate over currently proposed tax reforms, in order to save country from further economic slowdowns or tax hikes.

In a presentation given at the Intel semiconductor plant in Arizona on November 8th, the US Treasury Secretary Timothy Geithner called for greater cooperation between members of the national Congress to pass tax reforms and ensure the country’s economic stability and growth.

The Treasurer said that unless Republicans and Democrats can soon see eye to eye on tax and economic reforms, the country will need to raise corporate tax rates. He explained that without sufficient and timely tax reforms the USA will not be able to address its debt problems, and will spiral into a further economic downturn.

The warning comes only three weeks before a joint committee of representatives of the Republicans and Democrats are scheduled to release a national plan to reduce the national deficit by USD 1.2 trillion. The US President Barack Obama has submitted a proposed plan to the Committee, consisting of a number of spending reductions and tax increases. The plan included measures which would remove some tax benefits for the country’s wealthiest citizens, while implementing tax cuts for middle income earners and small businesses. The proposed plan is seeing a deadlock within the Committee and wide opposition from Republicans in the Congress.

Timothy Geithner claimed that unless the President’s proposals are passed, all taxpayers in America will experience some increased tax liabilities. He added that if tax reform is not handled efficiently, the country will see a sharp decline in funding for services, education and infrastructures.

If the Committee cannot reach an agreement by the end of November, the national budget will be cut by USD 1.2 trillion, with approximately half the reductions coming from lowered military funding and another half from cuts to social services. In addition, the move will likely result in the removal of previously instated tax cuts for corporations and wealthy individuals.

Photo by Center for American Progress