Sen. Max Baucus, a Democrat from Montana, and Rep. Dave Camp, a Republican from Michigan, have teamed up and taken a message of tax reform on the road.
The pair spoke in Philadelphia Monday as part of their “Tax Reform Tour,” an effort to eliminate loopholes in the federal tax code. Former governors Tom Ridge, a Republican, and Ed Rendell, a Democrat, are adding their support to the movement.
“Even with the sequester, the debt will grow as a percentage of GDP from 73 percent to, at the end of this decade, 79 percent,” Rendell said, “and if nothing is done by 2045, it will be 200 percent, the same as Greece, and we’ll be in desperate trouble.”
Lawmakers in both political parties say simpler, easier-to-understand tax laws would spur economic activity. One problem is that many of the biggest tax breaks are very popular. But, Rendell said one of the easiest ways to raise revenues is to get rid of tax loopholes.
“Each year the federal government loses in revenue $1.3 trillion, let me repeat that: $1.3 trillion a year to tax loopholes,” he said. “There are thousands of them and they have an army of lobbyists behind them, and most of them make no sense.”
Baucus is teaming with Sen. Orrin Hatch of Utah, the top Republican on the Senate Finance Committee, to write a new tax code, almost from scratch. Instead of trying to figure out which tax breaks to scrap, Baucus and Hatch are starting with a blank slate and inviting other senators to make the case for restoring various deductions, credits and exemptions.
Camp is trying to forge bipartisan relationships on the Ways and Means Committee by pairing small groups of Republicans and Democrats to develop options for addressing different parts of the tax law.
Rendell said if a debt deal is agreed upon, it would likely spur an explosion of spending, investment and hiring. He said coupling that with investment in infrastructure could help boost economic growth.
“Every one billion dollars of infrastructure spending produces 25,000 well-paying jobs that can’t be outsourced, you know you can’t outsource them to China — the work on a bridge or a road or a dam or a levy here in Pennsylvania or anywhere in the states, just think of the benefits that would come from that,” Rendell said.
Baucus said he is on track to meet individually with every member of the Senate by the end of the month. And every few weeks, Baucus and Camp invite about a dozen lawmakers to lunch at a Capitol Hill pub, always a mix of Democrats and Republicans, senators and House members.
Camp said he is committed to passing a tax reform bill out of the Ways and Means Committee by the end of the year. There is no guarantee the full House would vote on a bill, but Speaker John Boehner has signaled his support for the effort by reserving the prestigious bill number HR 1 for a tax overhaul measure.