‘Max and Dave’ Start Public Campaign for Simpler Tax Code

May 8 (Bloomberg) -- Treasury Secretary Jacob J. Lew speaks about the U.S. economy and spending cuts, the Treasury's budget, and funding of the Internal Revenue Service. He speaks at a Senate Appropriations subcommittee hearing in Washington. (Source: Bloomberg)

Calling themselves “Max and Dave,” the top two tax writers in Congress are starting a public-relations campaign for a simpler U.S. tax code.

Max Baucus, chairman of the Senate Finance Committee, and Dave Camp, his counterpart on the House Ways and Means Committee, set up a website -- www.taxreform.gov -- and a handle on Twitter -- @simplertaxes -- to gather public support and input as they try to revise the U.S. tax system.

“A simpler, fairer tax code will help families and it will help strengthen our economy,” Camp said in a statement today. “But Washington doesn’t have all the answers. That is why we are joining together in a non-partisan way to invite you to weigh in on this debate.”

Baucus, a Montana Democrat, and Camp, a Michigan Republican, have been working to build momentum for significant tax changes. Camp has released draft legislation on international taxation, small businesses and financial products. Baucus has begun a series of closed-door committee meetings on a tax-code rewrite.

They share a common deadline. At the end of 2014, Baucus will exit the Senate after 36 years and Camp’s term as Ways and Means chairman will expire.

They also have significant obstacles and divides between them. They disagree on whether some of the proceeds from limits on tax breaks should go toward deficit reduction or solely toward lower tax rates.

‘Very Difficult’

Getting a tax law that would accomplish their objectives is “going to be very, very difficult,” said Don Susswein, a principal in the Washington national tax office of the accounting firm McGladrey LLP.

Just asking for public comments and suggestions isn’t enough to rally the country behind the effort, he said.

“They need something specific that will be perceived as yes, gee, that would make my life simpler,” Susswein said. “You’ve got to propose something that’s going to capture the imagination.”

Baucus, 71, and Camp, 59, also need to find a way to move tax policy to the center of the debate in Washington.

“It’s a little hard to see what the catalyst is for getting a significant tax reform across the goal line,” said Donald Marron, director of the nonpartisan Tax Policy Center in Washington. “Simplification traditionally has been a selling point. There’s certainly a lot of complexity in the code.”

Higher Taxes

Any revision of the tax system would mean higher taxes for some businesses and individuals, who would probably oppose a plan with those changes.

Baucus and Camp conducted joint interviews with National Public Radio, USA Today and Fox News Channel. In the NPR interview, they acknowledged the divide on revenue.

Baucus favors reducing the budget deficit through a tax-code rewrite. Still, he voted against Senate Democrats’ budget plan in part because he considered a $975 billion tax increase in the legislation too big.

“My sense is like a lot of things in this town, that we’re going to have to compromise,” Baucus said.

Camp cited Republican opposition and said “that’s getting to the end game before we get there.”

Baucus and Camp are designing their public pitch as a 21st-century update of the “Write Rosty” campaign of Dan Rostenkowski, the Ways and Means panel chairman at the time of the last major tax-code rewrite in 1986.

“We want to know what people think the nation’s tax system should look like and how we can make families’ lives easier,” Baucus said in a statement.

That 1986 law was easier to sell to the public, in part because it was championed by President Ronald Reagan. While the law was revenue-neutral, it raised corporate taxes by 30 percent to reduce individual taxes by 8 percent, meaning that most individuals were better off, Susswein said.

To contact the reporter on this story: Richard Rubin in Washington at rrubin12@bloomberg.net

To contact the editor responsible for this story: Jodi Schneider at jschneider50@bloomberg.net

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