By Bernie Becker - 01/26/11 05:23 AM EST
Lawmakers from both parties commended President Obama for calling for tax reform during his State of the Union address. But there was less consensus on the president’s assertion that a revamp of the corporate tax code should be revenue-neutral.
Democrats applauded the president for that stance, while Republicans reiterated a point they’ve made previously: that it’s more important for a tax code overhaul to allow businesses to be more competitive than to break even initially when it comes to revenue.
Rep. Sandy Levin (D-Mich.), the ranking member of the House Ways and Means Committee, said that the administration had made it clear in discussions that it believed a tax reform measure should not add to the national debt.
“Do it in a way that doesn’t increase the deficit and do it in a way that gets rid of what doesn’t help competition,” he said.
But Republicans — as Rep. Kevin Brady (R-Texas) put it — said crafting a revenue-neutral plan would be a “challenge.”
“We actually need a lower tax rate, rather than just rearranging the complicated code we have,” said Brady, a senior member of the Ways and Means Committee.
For his part, Sen. Rob Portman (R-Ohio) made a similar point, saying that forcing a tax-reform package “to be revenue-neutral takes away some of the very benefit you would get from serious tax reform on the corporate side — which is to make our code more competitive by lowering the cost of doing business in America.”
Levin, meanwhile, was skeptical of the GOP argument: “I’ve seen that movie before,” he said.
Republicans and Democrats on the Ways and Means panel also sparred over how much revenue should be collected in reform legislation during a hearing last week.