Senate Finance chief announces focus on business tax reform

Senate Finance Committee Chairman Orrin HatchOrrin HatchOvernight Defense: Senate to vote on defense picks Friday | 41 detainees left at Gitmo | North Korea may be prepping missile launch Congressional leaders unite to protect consumers Mnuchin weathers stormy confirmation hearing MORE (R-Utah) said Friday that his committee was concentrating its early tax reform efforts on businesses because of interest from President Obama.

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Hatch, House Ways and Means Committee Chairman Paul RyanPaul RyanGOP waiting to hear from Trump on ObamaCare Five takeaways from Trump's inauguration Hispanic Caucus members slam Trump after inaugural address MORE (R-Wis.) and the top Democrat on Finance, Sen. Ron WydenRon WydenSenate confirms first nominees of Trump era Senate gears up for battle over Trump's CIA pick GOP, Dems hear different things from Trump MORE (Ore.), all prefer to revamp the tax code for individuals and corporations at the same time.

But with the administration again calling for business tax reform this week, Hatch noted that the five working groups on tax reform he just set up within the committee focused more on the business side.

“The president seems to want to do business tax reform solely. I would like him to go farther than that,” Hatch said at an event sponsored by the Brookings Institution. “But if that’s all we can do, we certainly will get a lot of ideas from these working groups.”

One of the five working groups is focused solely on business taxation issues. Two others — international and community development and infrastructure — also deal with policies that affect business taxation. Hatch said he hoped to get the groups’ recommendations by the spring, which he hoped could even be in the form of legislative text.

Both Hatch and Ryan have insisted that they’re willing to work on business tax reform with the White House, even with their preference for a more comprehensive overhaul. Treasury Secretary Jack LewJack LewOne year later, the Iran nuclear deal is a success by any measure Chinese President Xi says a trade war hurts the US and China Overnight Finance: Price puts stock trading law in spotlight | Lingering questions on Trump biz plan | Sanders, Education pick tangle over college costs MORE noted this week that the parties are far apart on individual tax issues, but have more overlap on tax policy for businesses.

“I believe there is real momentum to get something done on tax reform this year, if we remain committed,” said Hatch. “And, believe me, I’m committed.” 

Some Republicans have floated the idea of a tax reform deal that would also help fund infrastructure improvements, but Hatch and Senate Budget Committee Chairman Mike EnziMike EnziDem senator: DeVos ‘sends shivers down the spine’ Trump Education pick: States should decide on allowing guns in schools Schumer puts GOP on notice over ObamaCare repeal MORE (R-Wyo.) haven’t sounded enthused about that idea. At the same time, some Democrats would prefer that negotiations over tax reform include the individual side, which would allow them to fight for incentives for working families.

Hatch’s Friday comments came at an event discussing how the U.S. government should respond to the offshore tax deals known as inversions, in which a multinational corporation generally merges with a smaller foreign competitor and reduces its tax bill by moving its legal address abroad.

The Finance chairman had said in 2014 that he was willing to discuss targeted measures to stop inversions with Democrats, after high-profile companies like Pfizer, Walgreens and Burger King at least examined that sort of maneuver.

But Hatch made it clear Friday that he’s not interested in dealing with inversions outside of tax reform, even as he acknowledged that the rules Treasury issued in September to curb the offshore deals were working.

“If we’re serious about preventing inversions and about keeping American companies from picking up and moving their legal headquarters elsewhere, we need to get to the root of the problem,” Hatch said. “Anything else that we do – any tinkering along the regulatory edges – will only address the symptoms. In the end, it will be like using a Band-Aid to treat a broken arm.” 

Still, the Utah Republican also noted that Democrats and Republicans have yet to find common ground on perhaps the key issue on international tax issues — how much to limit U.S. taxation of profits that American companies make in other countries.

Hatch acknowledged the broader challenges of making progress on Capitol Hill as well, a day after Republicans and Democrats sniped at each other during the debate over the Keystone XL pipeline.

“If the Keystone pipeline is any illustration of what we’re going to go through the rest of the year, we won’t get it done,” Hatch said about tax reform.