Senator Predicts Success For ‘Blank Slate’ Tax Reform
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HELENA, Mont. (AP) — U.S. Sen. Max Baucus has just 16 months left in office, but he isn’t letting that stop him from plowing ahead on an aggressive plan to rewrite the nation’s tax code.
His “blank slate” approach requires backers of individual credits and deductions to argue for their inclusion in a revamped system.
Although Baucus, the chairman of the Senate Finance Committee, has collected some key allies — he also has some high-profile opponents. Majority Leader Harry Reid said he is not even going to consider a request for help on the proposal.
Baucus, however, following a meeting late last week of an advisory panel he convened in his home state, responded to skeptics with a cool confidence, saying his plan is certain to pass.
“We are going to reach a tipping point in the not too distant future where there is going to be inevitability,” Baucus said. “Then, they will all want to be on board.”
The third-longest serving member of the Senate acknowledges the hurdles ahead but predicts a bill will emerge by fall.
“Most members of Congress, the vast majority of Congress, know we should reform the tax code,” said Baucus, who has announced that he won’t seek a seventh term. “They hear from their people the same thing: It is way too complex. It gets in the way. American companies are losing their competitive edge, partly, because of our tax structure.”
Baucus’s proposed overhaul would be the first major change in the U.S. tax code since 1986. His plans aim to curtail tax breaks and reduce rates. Supporters say complicated tax laws cost too much in compliance and create loopholes, such as overseas corporate tax havens.
“My goal is to simplify as much as possible,” Baucus said.
So far, the proposal has met with a dubious reaction from congressional leaders and an overriding skepticism that revamping the tax code is simply too big of a topic for the hyper-partisan environment of Washington, D.C.
Baucus has faced down tough topics before. He was a key figure during the push to pass President Barack Obama’s federal health care overhaul. He suggested the political cynicism is normal at this stage but will fade.
“Once we start to become more specific, it then becomes real,” Baucus said.
Aside from Reid, some other key Democrats have been hesitant to embrace Baucus’s plan, with many saying they don’t want to lower the top tax rate as any overhaul would likely call for.
Republicans have said they don’t want to see a new tax code that increases revenue, which Baucus says is necessary for Democratic support. Though he says the money should go to deficit reduction.
Baucus has reached out to Senate colleagues for input, and he said without elaborating that about three-quarters of the chamber responded to tell him which benefits should remain.
He said he isn’t making any guarantees, even on popular deductions such as that for mortgage interest. He said “everything is on the table,” but he suggested it was unlikely such a break would disappear. Such benefits instead could have a cap or exclusions, he said.
The advisory panel of Montana leaders from business, education, labor and other fields highlighted key benefits to protect: the earned income tax credit and child care tax credit for low-income workers, small businesses expense deductions, some education deductions, retirement savings deductions and credits for innovation.
Baucus hopes to use such input to draft a proposal to bring to committee in the coming months.
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