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 "Though there are disagreements on the details, there is
bipartisan support for tax reform in Congress," said Orrin Hatch,
Republican chairman of the Senate Finance Committee, at a conference
for tax lawyers, analysts and economists.
"Members of both parties have expressed their support for a tax
overhaul. And, I believe there is real momentum to get something
done on tax reform this year, if we remain committed. And, believe
me, I’m committed," he said.
Hatch took over leadership of the committee this month when
Republicans gained control of the Senate. He has divided the panel
into five working groups. He said he expects to get recommendations
from the groups "later this spring."
The groups are looking at the individual income tax, business income
tax, savings and investment, international tax and community
development and infrastructure.
 The U.S. tax code has not been overhauled thoroughly in 28 years. In
that time it has become riddled with loopholes. As a result, tax
avoidance is a growing problem.
The loopholes, together with deep tax cuts some years ago, means the
government does not raise enough revenue to pay its bills.
At the same time, tax experts also generally agree that the system
is so complex and often contradictory that compliance costs are
excessive and economic productivity is harmed.
The main obstacle to fixing the code is that special interest groups
immediately leap to the defense of their particular loopholes
whenever lawmakers start talking reform.
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Finding a way to overcome the gridlock that results is a task that
has defied Congress and the White House since 1986.
Hatch has laid out basic principles for reform. At the conference,
he said he has the impression that Democratic President Barack Obama
might be willing to do a deal on business tax reform alone, setting
aside individual income tax issues.
"We need to lower corporate tax rates and transition toward a
territorial tax system," Hatch said. A territorial system is one
that would exempt all or most of the foreign profits of U.S.
corporations from the corporate income tax.
"The Senate Finance Committee is already fully engaged in a very
real tax reform effort ... My goal is to introduce such a bill and
mark it up in the committee later this year," he said.
(Reporting by Kevin Drawbaugh; Editing by Christian Plumb)
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