Congress should eliminate the “extraordinary complexity” in the U.S. corporate tax code and lower rates without giving companies a net tax cut, said Steny Hoyer, the second-ranking U.S. House Democrat.
“We’ve got to have a corporate tax structure that is, in fact, competitive with the rest of the world,” so Congress should “reduce preference items very substantially and bring rates down,” Hoyer said during an interview on “Political Capital with Al Hunt,” airing this weekend on Bloomberg Television.
Hoyer said Congress cannot afford to lose revenue in overhauling taxes. Asked whether his position was tax reform that doesn’t lose revenue, he said, “yes.”
Hoyer, 71, said Republicans who control the chamber may eventually discuss a long-term deficit-reduction package that addresses tax increases and entitlements such as Social Security.
“At this point” Republicans “won’t talk about revenues,” said Hoyer, a Maryland Democrat. “But they know in the back of their heads, even if they don’t articulate it” that “revenues have to be a part of this.”
“In order for us to bring down the deficit, we’ve got to cut spending, but we’ve also got to increase revenue,” Hoyer said. He noted that the U.S. is “at the lowest level” of tax collection in more than 50 years.
Hoyer, while stressing the need to “get a handle on this deficit” -- projected at $1.5 trillion this year -- took issue with some cuts being contemplated by House Republicans and President Barack Obama.
Social Security, Medicare
So far, Republicans are concentrating on a small portion of the total federal budget -- about 13 percent -- that doesn’t include defense or entitlements such as Social Security and Medicare.
They have “deluded, I think, the American people and themselves in believing” those cuts will solve the long-range deficit problem, Hoyer said.
By focusing on a relatively small and “very visible part of the pie” that “lends itself to demagoguery, you will not solve this problem,” he said.
House Republicans would be “penny-wise and pound-foolish” if they push plans to cut spending for education and the National Institutes of Health, he said.
The government’s “investment” in treating or curing cancer, diabetes and other “chronic diseases that cost our nation very substantial amounts of money” is “going to pay off in much bigger dollars,” Hoyer said.
Cuts in Education
“Clearly they’re looking at cuts in education, which are going to undermine” long-term investment in U.S. competitiveness, he said.
Hoyer said divisions over budget cuts among Republicans continue to leave Democrats “a little bit in the dark” about the majority’s plans for financing the government for the next seven months of the 2011 fiscal year. That’s due to a “very animated” discussion among Republicans seeking deeper cuts, forcing their leaders to find more ways to reduce spending, he said.
The 2012 budget Obama will submit to Congress next week will also include “painful cuts” of such programs as heating assistance for the poor. “They’re going to be troubling, particularly in a very cold winter,” Hoyer said.