US Tax Code an ‘Abomination’: Ex-Treasury’s O’Neill

The U.S. tax code is an "abomination" whose overhaul would help the economy by eliminating billions of dollars of waste, former Treasury secretary Paul O'Neill told CNBC Tuesday.

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O'Neill, who was fired by George W. Bush for opposing tax cuts and supporting overhauling the tax code in 2002, also said none of the current Republican presidential contenders are offering plans much better than what the Obama administration supports.

"What's holding the economy back are structural problems, and it’s why I have this hunger for an architectural president who is guided every day by telling people the truth about things they probably don’t want to know," said the blunt-talking O'Neill. "The fact that it seems to be out of reach doesn’t seem to me to be a reason not to want it."

The programs of the four Republican candidates "are at best mildly better than the predicted track that President Obama has laid out, which means a continuation of mind-boggling deficits and adding to a debtgoing up to 75 percent of (gross domestic poroduct) , which is madness."

Another round of quantitative easingisn't necessary, he said.

"I’m on the side of the people who see positive, consistent, not a gangbasters growth cycle," said the former head of Alcoa . "I think this year arguably we’re at 3 percent GDP."

O'Neill, who said he'd "rather be associated with good ideas" than a political party, said the tax code "costs us $200 billion to $300 billion a year to administer, and it undercollects what people are supposed to be paying by $400 billion a year."

He suggested "some kind of value-added tax, not as an add-on, but a replacement tax...would have a marvelous consequence for our economy. We would stop wasting resources that we really need and people could look at the tax system and say, this is fair."