“In order to make sure that we end up with a simpler, more efficient and fairer tax code, we believe it is important to start with a “blank slate”—that is, a tax code without all of the special provisions in the form of exclusions, deductions and credits and other preferences that some refer to as “tax expenditures,” Senator Max Baucus, the committee’s chairman, and Orrin Hatch, the committee’s ranking Republican wrote in a letter to the Senate’s 98 other members.
“The blank slate approach would allow significant deficit reduction or rate reduction, while maintaining the current level of progressivity,” the letter added.
“To make sure that we clear out all the unproductive provisions and simplify in tax reform, we plan to operate from an assumption that all special provisions are out unless there is clear evidence that they: (1) help grow the economy, (2) make the tax code fairer, or (3) effectively promote other important policy objectives,” the two senators added.
Baucus and Hatch have given their colleagues in the Senate until July 26 to submit legislative language or detailed proposals for what tax expenditures meet these tests and the provisions that should be retained, added, repealed or reformed in the new tax code
The two senators wrote that they were now “entering the home stretch” on tax reform after 30 hearings with hundreds of experts in the last three years and the publication during 2013 of 10 options papers that considered proposals to reform every area of the tax code.
More to follow...
