Treasury to meet on business tax laws

Treasury to meet on business tax laws

	Published : Tue, 10 Jul 2007 00:13 By : Agencies Print this Story

WASHINGTON (AP) - The Bush administration has scheduled a one-day conference to examine the impact U.S. business taxes have on economic growth and the country's competitiveness in a global economy.

Treasury Secretary Henry Paulson announced Monday that the conference will be held at the Treasury Department on July 26.

Treasury aides said the conference was part of the wide-ranging examination Paulson is conducting into competitiveness issues and the plan was to examine a variety of issues involving how the U.S. tax system affects businesses.

The tax conference comes at a time when various lawmakers are pushing legislation that would target private-equity firms and hedge funds for higher taxes.

Paulson, speaking last month in New York, said he disagreed with the approach of legislation that would boost the tax rate on all publicly traded partnerships that provide investment services from their current 15 percent rate to the 35 percent rate applied to corporations. He said he believed it would subject a single industry to higher taxes while other partnerships would still be taxed at 15 percent.

The sponsors of one of the bills, Senate Finance Committee Chairman Max Baucus, D-Mont., and Sen. Charles Grassley of Iowa, the panel's top Republican, have disagreed with Paulson's criticism. They contend their bill would simply clarify that private equity firms and similar businesses should not receive favorable treatment in the tax code.

A bill being sponsored by House Ways and Means Committee Chairman Charles Rangel, D-N.Y., and other House Democrats would have an even bigger impact, ending a little known tax-break that has allowed wealthy financiers who run private equity firms and hedge funds to cut their total income tax bills by billions of dollars.

In announcing the tax conference, Treasury said participants would include Treasury Undersecretary Robert Steel and Eric Solomon, Treasury's assistant secretary for tax policy.

The tax discussion will be the second competitiveness conference sponsored by Paulson. In March, Paulson held a conference at Georgetown University focusing on competitiveness and capital markets to hear the views of billionaire investor Warren Buffet and a parade of other Wall Street and corporate luminaries. That conference was held as some in Congress were calling for greater regulations for hedge funds.

Paulson has said a balance must be struck between ensuring the competitiveness of financial markets and protecting investors. He is seeking to address worries on Wall Street that U.S. financial markets are losing business to Europe and Asia.