The two top tax-writers in Congress said Monday that the prospects for tax reform are alive and well.
Senate Finance Committee Chairman Max Baucus (D-Mont.) and House Ways and Means Committee Chairman Dave Camp (R-Mich.) wrote in an op-ed that overhauling America’s “broken” tax code is long overdue, but they acknowledge the serious political challenges that come with tax reform.
“There are skeptics who question the prospects for bipartisan tax reform,” Camp and Baucus wrote in The Wall Street Journal. “We know we face some fierce headwinds. People from across the spectrum are trying to turn tax reform into a political weapon, which could end up killing any chance at success.”
“We can’t let that happen,” the chairmen added.
One of the reasons for skepticism: Democrats and Republicans have been at odds for years over whether the government should collect more tax revenue, a battle that may have only hardened after the top individual tax rates rose as part of the recent "fiscal cliff" deal.
Congressional tax-writers have also not yet delved into the nitty-gritty of exchanging tax breaks, which often have entrenched constituencies, for lower tax rates, a process that can anger lawmakers or lobbyists who will fight to keep a preference or incentive important to them.
Still, Camp and Baucus, who have forged a strong working relationship after meeting regularly for the last two-plus years, say they are committed to simplifying the tax code for U.S. families and allowing American businesses to be more competitive in the global marketplace.
The two chairmen say they also want any tax revamp to help small businesses, and they've pledge to make the reform process as transparent as possible by avoiding backroom deals.
The Ways and Means panel currently has 11 working groups dealing with a variety of tax reform issues, and Camp has pledged to pass an overhaul out of his committee this year.
The Senate Finance Committee, meanwhile, has also recently started full panel meetings, with the hope of crafting a comprehensive reform plan.
“While we cannot provide you every detail of the bill today, we can commit to you that we are writing tax reform bills,” Camp and Baucus wrote. “We’ll look to close loopholes like those used by some lawyers and celebrities to avoid paying the payroll tax on much of their earnings.
“We’ll make sure that companies can’t avoid paying tax on income they earn in the U.S. by pretending that they earned it in an overseas tax haven instead.”