Updated 8/2/2013: Newly released submissions to the Finance Committee have been added.
The deadline for Senators to make their arguments for what tax expenditures should be included in Sens. Max Baucus (D-MT) and Orrin Hatch’s (R-UT) “blank slate” approach to tax reform has now come and gone. Baucus and Hatch are going to great lengths to keep the submissions private, but some Senators have declined privacy and released letters to the public, with more expected to do so in the coming weeks.
The tax reform debate is heating up and many groups are weighing in on what tax provisions should be kept and what the broad revenue and distributional goals of tax reform should be. But Paul Weinstein of the Progressive Policy Institute, a former senior advisor to the Fiscal Commission reminds in a new report that lawmakers should not forget about the opportunity to make the code drastically simpler for taxpayers.
Today, the Campaign to Fix the Debt released a memo making the case for the “blank slate” approach to tax reform proposed by Senate Finance Chairman Max Baucus (D-MT) and Ranking Member Orrin Hatch (R-UT). The “blank slate” process would eliminate all of the $1.3 trillion in tax expenditures and put the burden of proof on lawmakers to justify adding them back at the cost of higher rates.
As Senator Finance Chairman Max Baucus (D-MT) and Ranking Member Orrin Hatch (R-MI) continue to work through tax reform using their "blank slate" approach, their Senate colleagues have 11 days left to submit “add-backs.” As we’ve written before, many tax preferences are expensive, regressive, economically distorting, and do not pass the cost-benefit analysis.
There is a clear consensus across the political spectrum that reforming the tax system will require going after the many tax expenditures that litter the code. However, many observers have commented that political difficulties could derail the process or signficantly scale back reform efforts.
As we begin to enter the dog days of summer, the weather is not the only thing that is heating up. The tax reform debate is beginning to escalate also as Senate Finance Committee Chairman Max Baucus (D-MT) and House Ways and Means Committee Chairman Dave Camp (R-MI) begin their tour of the U.S. to drum up support for reforming the tax system.
Recently, there has been some discussion of taking the employer-sponsored health exclusion off the table in tax reform. But for those interested in tax reform, health reform, or deficit reduction, doing so would be a mistake.
Yesterday, Senator Max Baucus (D-MT) and Representative Dave Camp (R-MI) kicked off their summer tour of the country in order to bring the tax reform debate to the American public. The tour started in St. Paul, Minnesota, and two former Minnesota Congressmen are excited that tax reform could be a real possibility.
In 2010 and 2011, the federal government "spent" nearly $50 billion in revenue on energy tax expenditures. But are these provisions actually achieving their stated goals? A new government report says no.
Among developed countries the US is unique in taxes in a number of different ways. One claim to fame is the fact that the U.S. now has the highest marginal corporate tax rate. The current marginal rate in the U.S. remains at 35 percent while the average marginal rate of the OECD countries, excluding the U.S., is a full 12 percentage points lower at 23 percent. At the same time, the revenue collected by the corporate tax is low by international standards due to the number of corporate tax provisions which make the effective rate not nearly as high.