Tax Break

Tax aides on tax reform: come lobby now, time may be short after the election

March 26, 2012

Dome of the U.S. Capitol REUTERS/Jonathan Ernst

Message to U.S.-based multinational companies: it is not too soon to lobby lawmakers on U.S. tax reform.

The messengers: former and current congressional tax staffers speaking at a meeting of tax executives in Washington, D.C., on Monday.

“Don’t wait until we’ve decided what we are going to do (to come see us),” Senate Finance Committee tax counsel Jeff VanderWolk, who works for Democrat Max Baucus, chairman of that panel, told hundreds of tax officials from Fortune 500 companies at a Tax Executive Institute gathering in Washington today.

Although major action on tax reform is not expected until next year, aides are working behind the scenes on key issues from preventing erosion of the taxpayer base to rules for so-called pass-through entities, companies that file through the individual side of the tax code.

Jon Traub, a former aide to Republican Representative Dave Camp, chairman of the House of Representatives Ways and Means Committee, said with the near constant election cycle, there might only be a short opening after the Nov. 6 congressional and presidential elections to complete a revamp of the tax code.

“The window that may open may only be open for five or six months,” Traub said, explaining why staff members are vetting key issues at this early stage.

Big issues remain, aides said, including basic agreement on how big government should be and how changes to the tax code will be distributed among different income groups.

Discord on that issue was underscored by a disagreement among the staffers about whether low-income taxpayers need to pay more in federal income taxes.

Due to various credits and deductions put in place by both Democrats and Republicans, nearly half of low-income taxpayers pay no federal income tax, although they still pay sales and payroll taxes.

“That is a further barrier to consensus,” said House Ways and Means counsel for Democrats, Michael Hauswirth, who indicated the tax code is skewed to the rich in large part.

Traub disagreed.

“Making the tax code more progressive than it is now when about half of Americans pay no income taxes is a tall ask,” for Republicans, he said.

It is easy to be for tax reform when it is talked about in the abstract, said Hauswirth, “it is like motherhood and apple pie, everyone says they love tax reform.”

That’s until they need to make the hard choices about trade-offs.

Comments
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USA tax structure is the fault and an obstacle to worldly potential. Transaction tax code imposes disproportionate burden at the most fundamental rights of liberty, justice. Any encumbrance on sustenance is contrary to equality in the ’pursuit of happiness’.
We need a tax code that balances the budget and maintians a constant monetary supply and value. This resposive to population growth, and exclusive income taxation by the confederation.

Tax Code Amendment
Taxation shall be with the consent of the people, and shall not encumber sustenance personal income. Taxation shall be yearly and exclusive to the confederation of states .
Tax sustenance margin level shall be controlled by plurality vote, and the income tax rate shall be graduated, and controlled by balanced budget and monetary supply dictate by the federal reserve board. It shall be nationally applied, allotting revenues 1/3rd Federal, 1/3rd State and 1/3rd City-County municipality. All revenue funds proportionally distributed between these thirds by voter turnout. Voter consent mechanism shall be a marginal tax threshold plurality judgment, made on each congressional election year vote of three choices 1) increase by 1%, 2) decrease by 1%, or 3) no change. All federal elections shall have a none of the above choice. This supersedes amendment 16 Income Tax; Congress shall not have the right to lay taxes.
On the first year of enactment, the sustenance margin shall be set at twice individual poverty yearly income($25,000).’ Income is defined as the sum total of all personal incomes. Couples may share income without restriction. (A couple would have an effective $50,000 threshold before paying graduated taxes.) A couple is defined as two persons with mutual family kinship by law. (examples: a) adults coupled by marriage, b) ‘adult or parent’ and child by law.
Import fee in the USA will be set at 99% the rate of the originator of corresponding imported goods. In the case of goods made from multiple components of multiple countries, the 99% fee will be set by the component of highest import fee of corresponding origin. The highest origin import fee shall be tersely defined with prejudice of any handling of said component(s).
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