Dem Senator, GOP Chairman Feel Pinch to Get Tax Reform Rolling
But in addressing corporate rates, both said, adjustments will be necessary to make it less desirable for companies to take advantage of tax havens and fix tax base erosion resulting from firms moving offshore.
Some are looking at the increased revenues that can be gained by addressing base erosion while others insist that any changes must be revenue neutral. That, Baucus said, is one of the key issues that will need to be compromised and resolved.
Otherwise, the two lawmakers said, all tax issues are under the microscope --including the mortgage interest rate deduction particularly popular with the middle class.
“Everything’s going to be on the table,” Camp said. “We’re going to look at all of the items. If there is consensus on an item that is going to be reformed or is going to stay as is, that’s where the rate is going to end up being and that’s the sort of trade-off and discussion I want to have and am having with the members of my committee.”
He added, “There’s a blank sheet of paper going in and we’ll see what comes out.”
Momentum for tax reform appears to have slowed somewhat as a result of the House Ways and Means Committee and the Senate Finance Committee both looking into the scandal regarding the Internal Revenue Service targeting of conservative groups seeking tax-exempt status. Both panels have spent a considerable amount of time on the issue and likely will continue to do so in the near future as they take testimony from those involved and await the arrival of pertinent IRS documents.
But Baucus maintains the focus on the scandal has not had a dilatory effect on tax reform.
“I think the IRS revelations are, frankly, helping to spur and help people realize the need for a reform bill,” he said.
And the chairmen may have bought some time, serendipitously so, as a result of the looming debate over the nation’s debt limit. House Republicans and others are looking to tie approval of the debt ceiling increase with an issue like tax reform. But because federal revenues are increasing and spending is down, the debt limit issue may not raise its head until mid-October, giving Camp and Baucus an elongated opportunity to put some package together.
President Obama has expressed support for tax reform but, to this point, he has not gotten in the middle of it.
“I think he wisely is looking at tax reform in same way he looks at immigration reform -- that’s carefully,” Baucus said. “In this climate, it may not be wise to be too upfront too soon. It might cause a bit of a storm. But he’s very involved – I meet with him on tax reform.”
Both men agree that a successful reform effort will contribute to the nation’s fiscal health.
“Tax reform is going to help the American economy,” Baucus said. “Help get jobs. And in this competitive world of ours we have to do everything we possibly can, legitimately and reasonably, to help the American people, help American small business, help American multinational corporations, American companies so they can compete better with less red tape and be less hidebound so they can focus more on jobs.”