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Hatch Outlines His Comprehensive Tax Reform Principles

by Mike Godfrey, Tax-News.com, Washington

19 December 2014


Orrin Hatch (R – Utah), Ranking Member of the Senate Finance Committee and its incoming Chairman, made a speech in the Senate on December 16, during which he listed seven principles he said are needed to guide future comprehensive US tax reform.

Following publication earlier this month of his in-depth analysis, entitled "Comprehensive Tax Reform for 2015 and Beyond," which outlined the issues policymakers will have to confront in the effort to reform the US tax code, Hatch confirmed his hope is that, in the future, "a path toward real bipartisan tax reform will begin to take shape."

Of his seven-point approach, the first three principles – economic growth, entailing cuts in tax rates; fairness, through broadening the tax base; and a simpler tax code to reduce compliance costs – were set out by President Reagan the last time there was tax reform in 1986.

He then added four more principles "to address the needs of today." They included permanence, to avoid the large number of tax provisions that expire regularly; competitiveness, by reducing the high tax rates on businesses and reforming the US international tax system; and the promotion of savings and investment.

However, his final principle of "revenue neutrality," the same one as he also insisted on earlier this year regarding any legislative proposals to counter corporate tax inversions, is contrary to the ideas of many lawmakers, particularly Democrats and President Barack Obama.

Hatch admitted that he knows "this will be a sticking point for some, though, for the life of me, I can't see why. If we're scouring the tax code looking for ways to squeeze more revenue to fuel government spending, we're not reforming the tax code, we're raising taxes. It's as simple as that."

"Tax reform should not be used as an excuse to raise taxes on the American people or on US businesses," he insisted. "We can talk about shoring up deficits and paying for spending, but we shouldn't be looking to the tax code as a resource for additional revenue."

He hopes to start the tax reform effort "early next year," and confirmed that he is "willing to work with anyone – Republican or Democrat – to reform our nation's tax code. And, I look forward to continuing this effort in the 114th Congress and, if necessary, beyond."

TAGS: individuals | compliance | Finance | tax | business | tax compliance | corporation tax | United States | tax breaks | tax reform | individual income tax | Tax

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