By Bernie Becker - 03/20/12 11:51 PM EDT
On Tuesday, Ryan said the tax reform plan would not add to the deficit, and that not all the tax preferences in the code would need to be eliminated to make that happen.
“We propose to get tax revenues — the same amount from Americans — not by picking winners and losers in Washington, but by treating everybody fairly and simply so we can have a more competitive tax system,” Ryan said at a Tuesday news conference.
In the budget itself, Republicans also say that eliminating tax loopholes while reducing rates would be a boon to the economy.
“It would stop diverting economic resources to less productive uses, while making possible the lower tax rates that provide greater incentives for economic growth,” the budget says.
But Baucus, who has a good working relationship with Camp, said GOP lawmakers needed to detail which tax preferences they want to prune from the code.
Republicans, the Montana Democrat told reporters on Tuesday, have “got to show where’s the beef.”
Baucus and Camp both have expressed an interest in overhauling the tax code, and have held joint hearings on the matter.
But few in Washington expect the tax-writing committees to finish off a tax reform plan by the end of this Congress, and Baucus's Tuesday comments showed Republicans and Democrats still have broad gaps to bridge.
“It’s just lipstick on a pig,” the Finance chairman said. “It’s last year’s reworked.”
Republicans also called for reducing the top corporate and individual rate to 25 percent, from their current high of 35 percent, in their fiscal 2012 budget, but add new tax reform details this time around.
The Urban-Brookings Tax Policy Center said on Tuesday that the new GOP plan would reduce revenues by roughly $4.5 trillion over a decade. But the nonpartisan group did not try to estimate the revenue impact of the entire budget, saying it did not include enough details on which tax breaks would get eliminated.
Deficit groups like the Concord Coalition and the Committee for a Responsible Federal Budget also suggested it would be hard to craft a plan like the GOP envisioned without eliminating at least the vast majority of tax credits and deductions.
“In order to lower rates to Ryan’s preferred levels, it is likely that almost all tax expenditures would have to be eliminated,” said Bob Bixby of the Concord Coalition.
For his part, Rep. Sandy Levin (D-Mich.) told The Hill that the GOP plan was “dangerously vacuous” and “irresponsible,” and agreed with Baucus that Republicans would face a heavy lift in trying to make their plan revenue-neutral.
“There’s no way to do that without very much helping further the very wealthy,” said Levin, the ranking Democrat on Ways and Means. “I can’t think of anything that’s really positive about it in terms of advancing tax reform.”
Levin also chided Ryan for classifying tax preferences for home mortgages, healthcare and charitable contributions as loopholes.
The Michigan congressman has long said that reducing the top individual rate could come at the expense of middle-class families, who benefit from tax credits and deductions.
“This assumption — 'Get a figure, don’t tell people how you get there, and that’s responsible,' ” Levin said, “I think it’s basically irresponsible.”