While an overhaul of the tax code would increase long-term economic growth, short-term tax cuts would not, a Federal Reserve official said Thursday.

"I would hope that as a country, we're pursuing tax reform rather than a deficit-financed tax cut," Federal Reserve Bank of Minneapolis President Neel Kashkari said at a Rotary event in Minnesota.

A simplification and improvement to the tax code that allowed businesses to spend more money on investing and growing rather than on accountants and lawyers would increase productivity, he suggested. A tax cut that added to the federal deficit would provide only a short-term boost to the economy, without making it more productive or competitive.

Republicans are attempting to reform taxes. While some lawmakers, such as House Speaker Paul Ryan and Ways and Means Committee Chairman Kevin Brady, have said that the goal is a permanent reform that doesn't add to deficits, others have expressed openness to a temporary tax cut, which would be politically easier.

Before joining the Fed system, Kashkari was a Republican candidate for governor in California and previously served in George W. Bush's Treasury, administering the 2008 bailouts.

The Fed is nonpartisan. But officials have counseled Congress in favor of a tax reform that eliminated some of the distortions in the current code.

An "appropriately designed tax reform could have a favorable effect on productivity," Fed Chairwoman Janet Yellen told a Senate panel in July.