By Naomi Jagoda - 02/24/16 04:59 PM EST
Senate Finance Committee Chairman Orrin HatchOrrin HatchMedicare trust fund running out of money fast Long past time to fix evidence-sharing across borders Overnight Tech: Facebook's Sandberg comes to Washington | Senate faces new surveillance fight | Warren enters privacy debate MORE called the U.S. tax system an “albatross.”
“It is a roadblock, designed almost haphazardly, that stands between us and long-term growth and prosperity,” the Utah Republican said Wednesday at an event hosted by Bloomberg BNA.
Hatch acknowledged that most people believe “comprehensive tax reform is a long-term goal.”
But “the facts of the ground may require Congress to narrow its focus and enact targeted reforms in the near future to address some problems that likely can’t wait while Congress tries to navigate all the minefields that come with comprehensive tax reform,” he said.
Hatch said he supports efforts of the House Ways and Means Committee to work on international tax reform, though he acknowledged that such a reform would be difficult to accomplish in the current political environment.
The Senate Finance Committee chairman also said he has been exploring “corporate tax integration,” an approach under which corporate income would only be taxed once. Currently, corporate income is taxed twice: at the corporate level and at the shareholder level.
Depending how corporate integration is designed, it “could significantly reduce effective corporate tax rates without all the difficult and highly politicized tradeoffs that will accompany a reduction in the statutory corporate tax rate,” Hatch said. He added that it could prevent U.S. companies from moving overseas and spur investment domestically.
A corporate integration proposal could move as a standalone bill or be part of an international tax reform bill, Hatch said.