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.
According to press reports today, Senate Finance Committee Chairman Max Baucus (D-MT) and Ranking Member Orrin Hatch (R-UT) are about to take a very encouraging step on tax reform this morning, releasing a letter to their colleagues to inform them that the Committee will follow the Fiscal Commission's "Zero Plan" approach to tax reform this year.
The United States has the highest statutory corporate tax rate in the developed world, but substantial revenues are forgone through a variety of tax loopholes and provisions. Responsible corporate tax reform could lower statutory rates while simplifying the tax code and eliminating these loopholes.