U.S. President Barack Obama (L) shakes hands with House Minority Leader John Boehner as House Minority Whip Eric Cantor (R)
U.S. President Barack Obama shakes hands with House Minority Leader John Boehner as House Minority Whip Eric Cantor (R) watches before speaking at the GOP House Issues Conference in Baltimore, Maryland, January 29, 2010. REUTERS

Talks on how to approach U.S. corporate tax reform are stirring to life again as Republican House majority leader Eric Cantor backed of push to give multinational companies a break on money imported to the U.S. from their subsidiaries owned in other countries.

Cantor has been in his home state of Virginia this week as the House takes a break from lawmaking business, to advocate for a corporate tax break on offshore profits in the near term.

However one Obama administration official said Wednesday that such a change in the tax laws should not pass alone and cannot be separated from a larger package of comprehensive corporate tax reforms.

I propose that we allow U.S. multinational companies to bring back almost $1.2 trillion in overseas profits at a lower tax so they can invest in our economy at home, Cantor told realtors at a forum in Richmond, VA on Thursday.

Rep. Brian Bilbray of California introduced a bill about two weeks ago that would establish a tax holiday from the current 35 percent repatriation tax U.S. companies pay when bringing foreign earned assets into the country. The bill is known as H.R. 1036, The Job Creation and Innovation Investment Act of 2011.

Michael Mundaca, the Assistant Treasury Secretary for Tax Policy, said Wednesday that the Obama administration differs on the approach to tax reform and where the repatriation tax should fit in changes to the broader corporate tax reform.

Lettin our eye off the ball of comprehensive tax reform in favor of a temporary measure of this kind would be a mistake, he said.

He said in a similar measure enacted in 2004, the goal was to encourage U.S. multinationals to pay bigger cash dividends from their overseas subsidiaries and use the cash to make investments in the U.S.

Unfortunately, there is no evidence that it increased U.S. investment or jobs, and it cost taxpayers billions, he said.

Cantor wants to lower the corporate tax rate to 25 percent, from a high of 35 percent. President Barack Obama proposed doing in his State of the Union Address in January by eliminating tax loopholes.

However Cantor sees that taking too long.

Forging consensus on this type of fundamental tax reform will take time, he said.