Congressional leaders gear up for broad tax reform push

[Valin]

The Hill:

Alexander Bolton

12/21/15

 

Lawmakers say passage of a major tax deal has increased the chances that Congress will tackle tax reform in 2017.

 

The $680 billion tax bill approved last week gives hopes for reform a major boost, supporters say, by altering the budget baseline in a way that could make it easier to lower the 35 percent corporate tax rate — one of the highest in the world. Reducing that rate has long been a goal for Republicans, who argue it makes the U.S. less competitive on the global stage. In addition, few corporations actually pay the 35 percent rate because of tax breaks.

 

The new deal makes locks in a number of expensive tax breaks that could be traded as part of future legislation that lowers the corporate rate. Allowing the breaks to no longer expire makes it easier to lower the rate but not add to the budget deficit.

 

“The big benefit for tax reform is that by extending these tax provisions permanently, you change the baseline. In other words, you assume there would be relatively less revenue coming in to the [Congressional Budget Office] baseline,” said Sen. Rob Portman (R-Ohio), a member of the Finance Committee. “This is the big boost for tax reform going forward,” Portman added. “Specifically, I think it makes about a 3-point difference on the business rate, if you want lower the business rate.

 

(Snip)