Obama administration will keep tax rates at levels that benefit job-creating businesses and limit taxes on capital gains and dividends, U.S. Treasury Secretary Timothy Geithner said on Wednesday.
Interviewed on CNBC's The Kudlow Report, Geithner said the intent is to extend and keep in place tax cuts that should benefit 95 percent of businesses.
We're going to make sure that we keep at 20 percent the existing rates on dividends and capital gains, Geithner said. We think that's good policy.
Capital gains on investments held for at least a year are currently taxed at 15 percent for upper income earners, the same rate as eligible dividends. Without action by Congress the tax rates would revert to 20 percent for capital gains in 2011 and nearly 40 percent for dividends.
Geithner said some tax cuts for individuals that were put in place by the former George W. Bush administration will be allowed to expire but said that will affect only people in the top two to three percent of income earners.
He said the U.S. economy was still in a process of healing from the 2007-2008 financial crisis but added it was growing.
I think the most likely thing is you're going to see an economy that is growing at a moderate pace, hopefully strengthening over time, Geithner said.
Boosting U.S. exports will be key to ensuring growth continues, Geithner said, nodding to comments made earlier by president Obama who said the United States wants a level playing field for U.S. companies in China and pledged to push ahead with free trade deals with three other nations.
We have a pro-growth agenda, part of that agenda is growing exports. They're central to our future. What the president (did) today is to say, 'That is important to the United States, we're going to be committed to making sure we're expanding opportunities for American businesses everywhere, Geithner said.
(additional reporting by David Lawder; Editing by Sofina Mirza-Reid)
(Reporting by Glenn Somerville)