As part of his new tax plan, the president has proposed ending the “step-up” in tax basis for inherited assets, and, furthermore, requiring the capital gains tax to be paid at death rather than when an heir later sells...
- The Tax Policy Blog
- Sen. Baucus Addresses Bipartisan Policy Center
Sen. Baucus Addresses Bipartisan Policy Center
Senate Finance Committee Chairman Max Baucus, D-Montana, gave a speech this morning at the Bipartisan Policy Center in Washington D.C. where he recognized that “our tax code is growing out of control” and proposed an overhaul to both simplify the code for corporations and individuals as well as raise revenue. The four key principles Senator Baucus intends to implement are jobs, innovation, competitiveness, and opportunity. However, besides noting that any efforts on deficit reduction should “ramp up over time, to avoid slowing down the economic recovery,” Baucus provided little detail on how he intended to implement his principles into the tax code.
While Senator Baucus acknowledged that negotiations on avoiding Taxmageddon between Democrats and Republicans have already begun and are using the Bowles-Simpson and Rivlin-Domenici plans as a base of discussion, he also said that any action on this issue or tax reform as a whole is highly unlikely before the lame duck session of Congress following the November elections.
While both parties agree that the present tax code is in need of simplification, a chasm remains between them on the question of revenue; Democrats hope to increase revenues coming into the federal government through tax reform, while Republicans have insisted that any tax reform plan remain revenue-neutral compared to the present tax code.
Despite this ideological gap, Senator Baucus was confident that members of the GOP can be brought onboard with revenue increases through tax reform if Congress can collectively keep the details of his proposal secret long enough to give the GOP “flexibility” on the matter. The Washington Post reports:
“‘It is my view …that we should try to avoid divisive votes before the election,’ Baucus said of such political maneuvering. ‘Because I don’t want members of the House and Senate too blocked in. It makes it difficult to maintain trust to do what’s correct.’”
In addition, Baucus indicated that he hoped to use the prospect of Taxmageddon to force both sides to the table and the $1.2 Trillion sequester from last year’s failed debt limit deal “as a good point of leverage to get results.”
Video of Senator Baucus’ speech at the Bipartisan Policy Center is here.
For more on federal tax reform, click here.
Follow Scott Drenkard on Twitter @ScottDrenkard.
Subscribe to the Tax Foundation Newsletter
Join the Tax Foundation's fight for sound tax policy Go
About the Tax Policy Blog
The Tax Policy Blog is the official blog of the Tax Foundation, a non-partisan, non-profit research organization that has monitored tax policy at the federal, state and local levels since 1937. Our economists welcome your feedback. If you would like to send an e-mail to the author of a blog post, please click on that person's name to locate his or her e-mail address or visit our staff page here.