Lawmakers Use Web To Request Help Simplifying Tax Code
STEVE INSKEEP, HOST:
Okay. Republicans and Democrats disagree massively on federal taxes, but leaders in both parties insist they would like to simplify the tax code, and this morning we'll hear from two key lawmakers who are advocating tax reform together.
DAVID GREENE, HOST:
Republican Dave Camp of Michigan is the chairman of the House Ways and Means Committee.
INSKEEP: And Democrat Max Baucus is chairman of the Senate Finance Committee, which means that any tax legislation begins with them.
GREENE: The two men have presided over dozens of hearing with experts and special interests groups. Now they are trying to build public support, launching a website today that invites Americans to share ideas.
INSKEEP: Now, for both men this Congress is a kind of last chance for tax reform. Chairman Baucus retires at the end of next year. Chairman Camp leaves his chairmanship due to term limits, but he vows to act soon.
REPRESENTATIVE DAVE CAMP: We're going to get it done. I'm going to vote it out of committee this year, so we're committed to getting it done.
INSKEEP: You have the votes and you know that's going to be the case. It's going to happen.
CAMP: Well, I've made the commitment...
INSKEEP: At least as far you can push it.
CAMP: Well, I've made the commitment that we're going to address it in committee this year and so the answer's yes.
INSKEEP: Let me ask you both. Is this a moment when you think the broader budget fights that Congress and the administration have had, some of which, as you know, have been almost catastrophic, could actually work in your favor? Is there a way that you can use the pressures of the moment to get this legislation moving?
SENATOR MAX BAUCUS: I think the pressures will help. The debt limit will probably need to be raised sometime this fall, maybe in September. Some are going to look at that to change the sequester. Some are going to look at it to maybe address entitlements, and some are going to think about tax reform. I don't know. But I do think that the time has come.
INSKEEP: This is an insider's game. It involves a tax code that hardly anybody understands in full, maybe beyond the two of you. And yet the public must have some role to play here. How do you involve the public in this debate?
CAMP: Well, the public has a huge role to play because they're the ones who have to suffer under this nightmare of a tax code and its complexity and the number of hours it takes to comply. The average person 13 hours, 6 billion hours for the nation; this isn't productive time. So with this website that we're starting jointly, taxreform.gov, we want to be able to hear the stories of people who have had difficulty filing, who have ideas on how we can improve the code.
We've had more than 50 hearings between our two committees, but now we need to really hear from the average person because I want the average person to be able to fill out their own taxes when we get all done with this.
INSKEEP: Let's remind people the basic notion of tax reform is you simplify the tax code, you eliminate deductions and credits and as a result you're able to lower everybody's rates. That, I think, is understood. What maybe is not understood is the shape of the bills that you are drafting. Can you give us an idea, for example, of a specific deduction that you both think you want to go after?
CAMP: Well, what we're trying to do is set up a framework where we don't take the current tax code and see what individual thing we pull out. But we take a blank piece of paper and start over. How do we get rates down and then how do we find a way to get rid of the almost 4,000 changes to the code in the last decade? I think it's more than that, certainly since '86, more than 15,000.
So there's been a lot of layering upon layering and tinkering with the tax code. The complexity is really the big thing that we're going to try to get at.
BAUCUS: One thing, if I can, right there that I know we agree on, and I know the American public agrees on, these loopholes which allow corporations, many corporations, not to pay income taxes. And a lot of these loopholes are tax havens overseas that a lot of multinational corporations will park their intellectual property or their digitized property in a subsidiary setup in, say, Cayman Islands or some tax haven.
INSKEEP: And it's not taxed...
BAUCUS: And it's not taxed. And that's just not right. But as Dave said, when we start from scratch, start from no deductions, no credits, no exclusions, that puts the burden on them - that is, those who want those provisions - to state a better case as to why they should be in.
INSKEEP: Many people noticed when the fiscal cliff legislation was passed a few months ago to avert that potential disaster, that there were a number of tax breaks, tax credits that got into that legislation that were extended, tax breaks for things like building racetracks for Nascar. And I wonder if that gives you gentlemen pause.
If, in that high pressure situation, Congress could not even hold back Nascar, can you really do anything big on this issue?
BAUCUS: Well, first of all, I was not in favor of that Nascar break. I thought it was wrong.
INSKEEP: Not that there's anything wrong with Nascar.
BAUCUS: I know. I've gone to a couple of races myself and had a good time, but I don't think there should be a break. The larger issue is this. Kind of on a net basis, the degree to which we can simplify the code and get rid of a lot of the complexity and so forth and lower rates, but we're also going to have probably address the question of how much more income, more revenue, to be raised...
INSKEEP: How to bring in more money through this process.
BAUCUS: Bring in more money, and that is for debt reduction. But the goal here is to simplify. It may not be perfect, but it'll be much more simple and much more understandable. At least that's the goal.
INSKEEP: Senator Baucus mentioned more revenue. Let's mention that although everyone has been vague, it appears that when the White House, President Obama, talks about tax reform, he's talking about a process that in addition to simplifying the tax code could bring in more money, could bring in more revenue. Many Republicans have said no, that's absolutely not what we want.
We want it to be revenue neutral. It brings in no more money. Do the two of you agree on that really vital issue, hundreds of billions of dollars at stake here?
BAUCUS: Well, that's a fundamental question that's being asked in this debate. My sense is, like a lot of things in this town, that we're going to have to compromise, that if we want tax reform, there's going to be some rate reduction, there's going to be some revenue raised. But the amounts are really going to depend on what transpires between now and when that decision is made.
INSKEEP: If a compromise, and Senator Baucus used that work, were to include greater revenues, Chairman Camp, do you think that your fellow Republicans in the House would approve it as part of a broader tax reform package?
CAMP: Well, we're talking about how we can get the best code. I think that's getting to the end game before we get there and it would obviously depend on what the tax code looked like. But I can tell you right now, most of my caucus is not in favor of more revenues. They think we did that at the end of last year. So we've got to move forward on getting the policy right and working together to get the best possible tax code and then we'll resolve those issues as we move ahead.
INSKEEP: Chairman Camp has said, and you'll correct me if I misremember, he's moving a bill out of the Ways and Means Committee this year, that it's at least going that far, as far as he has the power to do it. Is the same thing going to happen in the Senate Finance committee? You're going to vote on a tax reform bill this year.
BAUCUS: We'll see. I don't know. I cannot answer that question definitively. It depends on how quickly we can get an agreement in the committee, the Finance Committee. We've got some work ahead of us there. Not because of disagreement, just because little more educating is necessary and then we'll reach a point where I think we'll pass legislation. And if it's good legislation and it tends to make some sense, then it's more likely that the Majority Leader Harry Reid will want to schedule it on the floor and it's more likely we'll be able to pass it with 60 votes.
INSKEEP: Chairman Baucus, Chairman Camp, thanks to both of you.
CAMP: Thank you very much, Steve.
BAUCUS: Thank you.
INSKEEP: Two leaders on tax policy, Max Baucus, chairman of the Senate Finance Committee. Dave Camp is chairman of the House Ways and Means Committee. And you've been listening to them right here on MORNING EDITION from NPR News.
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