HELENA – U.S. Sen. Max Baucus is forging ahead with his aggressive plan to rewrite the nation’s tax code in the next year, confident he can find common ground amid the intense partisanship stalling budget debates in Washington, D.C.
Last week, the Democrat unveiled two big portions of his proposal dealing with offshore taxation of corporations and revised rules for some tax accounting. In the coming months, he expects to release proposals for taxes on individuals and exemptions.
Baucus pushed the plan forward despite reservations from Republicans that it could be a vehicle for tax increases. The Senate Finance Committee chairman said there is a bipartisan desire, generally, for tax reform, and he hopes to bring both sides together as he tries to revamp the tax code before retiring at the end of next year.
Baucus has already spent several years working with Republican lawmakers trying to reach agreement. Baucus said his sales pitch for a simpler system with fewer loopholes is simply “jobs.”
“This will help create more jobs. This will help boost peoples’ incomes,” Baucus said in an interview last week.
The part of the proposal dealing with international taxes was designed to make U.S. corporations more competitive while making it harder for them to use overseas tax havens. It aims to encourage U.S. corporations to bring home an estimated $2 trillion in profits.
The tax accounting and cost-recovery rules determine when businesses can deduct investments.
One change increases the annual threshold for the amount of some expensing to make taxation for businesses easier. It would also change depreciation rates and other rules, such as those guiding the deduction of the cost of research and development and other items.
Baucus said he has been relying on a Montana council for ideas important to farmers, small manufacturing companies and others.
He said he is going to keep pushing the plan until people “gradually” get more comfortable with it.
He said he is optimistic that he can convince both sides to come together on an issue despite gridlock on other key topics. Baucus said the key will be to find a way to do this without making either side compromise principles.
“To be successful, we have to find common ground because either side can block the other,” Baucus said.
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