The Senate Finance Committee’s top Democrat and top Republican will write to their 98 colleagues on Thursday and ask them to detail which tax breaks should be retained as part of an overhaul of the tax code, reports say.
The idea for the Finance Committee is to consider revisions to the tax code by first eliminating all tax breaks and ask lawmakers to justify restoring them, congressional aides told Bloomberg.
Max Baucus, a Montana Democrat, chairs the committee. Orrin Hatch of Utah is its ranking Republican.
“For investors, this will be worth watching,” Potomac Research Group’s Greg Valliere wrote in a note on Thursday morning. “Dozens of sacred tax breaks – accelerated depreciation, the mortgage tax deduction, charitable contributions, etc. – will be on the table.”
He still gives chances of enactment very low odds this year or next because Democrats and Republicans differ over whether tax reform should be revenue neutral or raise revenue. But he sees better chances for far fewer deductions and a flatter tax code by the end of this decade.
Baucus has been working with House Ways and Means Committee Chairman Dave Camp, a Michigan Republican, on a tax-code overhaul. Camp has pledged to pass an overhaul bill through his committee by the end of this year.
How sobering is this?
The last major tax reform was done 27 years ago in 1986. There have been 15,000 – yes, fifteen thousand – changes to the tax code since then. (http://www.nytimes.com/2013/06/28/us/politics/finance-committee-asks-senators-to-start-tax-reform-process.html?_r=0)
Additional reading about ‘residential’ versus ‘territorial’ tax systems and something called a "Double Irish with a Dutch Sandwich" (that you won’t find on the local coffee shop lunch menu!) is at… http://knowledge.wharton.upenn.edu/article.cfm?articleid=3291
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