Members of the new congressional committee on deficit reduction are showing considerable interest in the idea of revamping the tax code. At a public hearing last Thursday, however, lawmakers on the panel expressed differing views over what changes should be made and what to do with the resulting revenue.
The panel also discussed tax issues in a private meeting yesterday and was continuing its work today.
The president’s fiscal commission, the Bipartisan Policy Center’s Debt Reduction Task Force, and other bipartisan groups have recommended reforming the tax code by reducing or eliminating many of the breaks – also known as “tax expenditures” -- that favor some taxpayers and businesses over others. The Concord Coalition favors such reforms as well, noting that they would allow for both lower tax rates and significant deficit reduction.
In last week’s hearing, Sen. Max Baucus (D-Mont.), a member of the new super committee and chairman of the Senate Finance Committee, indicated support for overhauling the tax code but warned that the changes could result in “big dislocations” and hurt some industries.
Rep. Jeb Hensarling (R-Tex.), co-chairman of the super committee, said tax reform could “result in both revenue from economic growth for the federal government and more jobs for the American people.”
Also last week, the Committee for a Responsible Federal Budget hosted a three-panel program featuring lawmakers and budget experts who encouraged the super committee to “go big” by aiming for a deficit-reduction plan large enough to stabilize the federal debt as a share of the U.S. economy.
The super committee is seeking suggestions through its website, which is accessible below.