THE OBAMA administration will propose measures “over the next several months” to address the avoidance of US tax by US corporations operating overseas, treasury secretary Timothy Geithner said.

“Some proposals will focus on the rules in our tax code that put those who invest and create jobs in the United States at a disadvantage. We will propose rules to both reform US corporations’ ability to defer foreign earnings and deter high-income individuals and corporations from using tax havens to avoid taxation,” he told the Senate budget committee yesterday.

President Barack Obama promised in his budget blueprint for 2010 to end tax breaks for US firms that “ship jobs overseas” but it remains unclear how the new rules will affect US companies based in Ireland. Ireland is not generally viewed by US legislators as a tax haven but changes to the way companies can defer taxation on foreign earnings could affect companies with Irish operations, notably pharmaceutical firms.

Mr Geithner arrives in London today for a meeting of finance ministers from the Group of 20 (G20) leading industrialised nations. Mr Obama, who will attend a G20 leaders’ summit next month, said that jumpstarting the global economy needs concerted action.

“The United States is part of the integrated global economy. And so we have to not only think about what’s happening here at home, but in order for us to grow businesses, create jobs here at home, we also have to be mindful about what’s happening overseas,” the president said. “And that’s why, at this G20 meeting, one of the things that Secretary Geithner is going to be talking about is how can we make sure that developing countries that may be very hard hit as a consequence of the contracting economy, how do we make sure that they remain stable, that they can still purchase American goods?”