WASHINGTON (Reuters) - The U.S. Treasury's top tax policymaker said on Wednesday that the department does not support the idea of giving companies a "tax holiday" on overseas profits to encourage them to invest more at home.
In a posting on Treasury's website, Assistant Treasury Secretary for Tax Policy Michael Mundaca noted that years ago some U.S. multinationals got such a break but said it didn't create jobs and it cost taxpayers money.
Preferable instead would be to continue to push for a comprehensive overhaul of the U.S. corporate tax system that lowers rates and makes companies more competitive, he said.
"In 2004, when the U.S. enacted a repatriation tax holiday, 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 United States," Mundaca said.
But, he added, "there is no evidence that it created U.S. investment or jobs, and it cost taxpayers billions."
Mundaca suggested that treatment of overseas earnings could be considered as part of broader corporate tax reform but said it would not be "sensible" to consider a repatriation holiday separately from comprehensive reform.
(Reporting by Glenn Somerville; Editing by Padraic Cassidy)