U.S. Treasury Secretary Henry Paulson told CNBC on Monday that the United States needs to change the current corporate tax system and recommended cutting taxes in order to spur economic growth.
"Right now, we have a good number of special preferences for one industry or another, many of which make great sense if you look at them individually. But if we didn't have them we could have tax rates [that] are 25% lower," Paulson said during an exclusive appearance on CNBC's "Kudlow and Company."
"We've got a strong economy, but we need to look forward," he added. "We need to look a few years down the road and ask ourselves, 'Are we well-positioned to be competitive looking forward with a tax system that is as complex as ours is and the rates are as high relative to our competitors around the world?'"
Paulson also reiterated his view that a strong dollar is in the nation's interest, and the value of the greenback "should be determined in a competitive marketplace based upon underlying economic fundamentals."
"I believe this country has very strong economic fundamentals," he added. "We are making what I believe to be a successful transition from a rate of growth in this country that wasn't sustainable to one that is sustainable."
In addition, Paulson said the global economy is currently in the best shape he has ever witnessed.
"I believe we have as strong a global economy as I've seen in my business lifetime," said Paulson. "I don't think there is much argument that we are in a strong global economy."
Speaking of the flagging U.S. housing market, Paulson said he believes it is at or near a bottom, and issues related to the subprime mortgage industry are "quite containable."
"You can't go through the kind of housing correction we've gone through without some side effects that will go on for a while," he said. "But do I think these risks are contained? Yes, I do."