Taylor Harvey contributed to this post.
BPC hosted Senator Max Baucus (D-MT) today as he presented his goals for a comprehensive tax reform package, which he cited as a crucial part of solving the federal government’s fiscal woes. The event was sponsored by BPC as a part of its efforts to promote a fiscal plan that would stabilize the nation’s debt. Senator Baucus said that he intended to use both BPC’s Domenici-Rivlin plan and the recommendations of the president’s Simpson-Bowles fiscal commission as starting points for full-scale tax reform. He expects to hold hearings on both bipartisan proposals.
Baucus opened by emphasizing a goal-oriented strategy of tax reform, noting the piecemeal approach taken since 1986 has resulted in an inefficient and overly complex tax code. The four goals Baucus hopes to use as a framework for tax reform are job creation, competitiveness, innovation and opportunity.
To spur job creation, Baucus recommended lower rates and paying for them by eliminating many tax expenditures, which cost as much revenue as the income tax brings in. He argued that many tax expenditures impede market forces, and any left in the code need to demonstrate a tangible benefit to the economy and society.
Baucus also cited the importance of promoting international competitiveness through the tax code. He said simplifying the tax code can make bringing business to the U.S. more attractive and discourage companies that are already here from sending their profits to tax havens overseas.
Another goal of Baucus’ tax reform plan is fostering innovation at home. To do this, he recommended changing the tax code to put research and new technologies on an even field with existing technologies.
The last goal Baucus outlined was to create more opportunities for all Americans to achieve success. Baucus suggested reevaluating tax benefits, ensuring they help those who start out with fewer opportunities, particularly in education. Baucus emphasized the need for congressional leaders to work together saying, “Nothing of consequence is ever accomplished by doing something alone. You have to work with people.” Following his remarks, expert panelists including BPC Debt Reduction Task Force Co-Chair Dr. Alice Rivlin, former Senator Bob Packwood, former Representative Bill Thomas, and Center on Budget and Policy Priorities President Robert Greenstein responded to the statement.
The panel was moderated by National Journal Budget Editor Kristin Roberts.
Transcript from the event BPC Press Release: Press Release: Baucus Outlines Goals for Comprehensive Tax Reform at Bipartisan Policy Center U.S. Senate Finance Committee Press Release: Press Release: A New Tax Code for a New Era
Fox Business Video: Baucus Calls For Bipartisan Support for Tax Reform Associated Press: Key senator wants tax overhaul to reduce deficits Reuters: U.S. Senate panel chief to detail tax code vision Bloomberg Businessweek: Baucus Urges Deficit Plan With Tax Increase, Spending Cut