Baucus Joins Call for Lower Corporate Tax Rates
By J. Craig Shearman
Washington Retail Insight
June 12, 2012
Senate Finance Committee Chairman Max Baucus said this week that he’s developing a comprehensive tax reform proposal that would lower corporate tax rates in return for eliminating tax breaks that aren’t creating jobs or boosting the economy.
“We give countless tax breaks to business, but many don’t attract or retain investment,” the Montana Democrat said during a speech at the Bipartisan Policy Center on Monday. “Every tax provision needs to prove it has a tangible benefit to our economy or society. If not, it doesn’t belong in the tax code.”
Baucus, who has held a series of hearings on tax reform in the past year, did not specify which tax provisions he wants to eliminate or what tax rate he favors. But he broadly proposed eliminating many of the tax credits and deductions that benefit specific industries and using the revenue that would be generated to lower tax rates for all businesses. With retailers receiving few tax breaks under current law, NRF has long supported such an approach.
“Tax breaks that benefit only a few industries aren’t going to help create jobs, if they ever did,” NRF Senior Vice President for Government Relations David French said. “Whether you’re a manufacturer or a retailer, a simpler tax code with lower rates would let businesses invest money where it will grow the economy and create jobs, not where it fits into the tax code to bring the biggest tax break.”
Senate Finance is one of the two key tax-writing committees in Congress, and French said having Baucus endorse the concept of broadening the tax base and lowering rates “makes it clear that tax reform is not a matter of if but when.”
“Decision makers on both sides of the aisle from the Capitol to the White House have been lining up to say we need to fix the tax code,” French said. “This is a bipartisan opportunity to get our economy back on track, and retailers are ready to do their part.”
In the past several months, President Obama, House Ways and Means Committee Chairman Dave Camp, R-Mich., and House Budget Committee Chairman Paul Ryan, R-Wisc., have all proposed variations on the same approach. Obama has proposed cutting the current 35 percent corporate tax rate to 28 percent, while the two Republicans have called for 25 percent.
Baucus said he specifically wants to reduce the dozens of “temporary” provisions in the federal tax code that are repeatedly renewed but lead to anxiety for businesses as they wait to see what will happen each year. There were only 14 temporary provisions in the law in 1986, the last time the tax code saw comprehensive reform, but the number has grown to 132 since then.
“Uncertainty in the tax code impedes growth,” Baucus said. “That makes it tough for families and businesses to plan or invest in their futures. We need to take a hard look at each and every (temporary) provision to decide which to make permanent and which to eliminate.”
© 2012 National Retail Federation
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