(Senate - June 27, 2013)

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[Pages S5481-S5483]
From the Congressional Record Online through the Government Publishing Office []

                               TAX REFORM

  Mr. BAUCUS. The philosopher Bertrand Russell said, ``The greatest 
challenge to any thinker is stating a problem in a way that will allow 
a solution.''

[[Page S5482]]

  I come to the floor today with my good friend Senator Orrin Hatch to 
state our concerns about a national problem that is holding back our 
economy. We are here to call on our colleagues to provide ideas that 
will allow a solution.
  First, the problem. America's Tax Code is complex, it is inefficient, 
and it is acting as a brake on our economy. Senator Hatch and I believe 
it is in need of a serious overhaul. It has been close to three decades 
since the last major revision to the Tax Code. In that time Congress 
has made about 15,000 changes to the Tax Code. The Code now contains 
nearly 4 million words. Here it is, right here. The Tax Code. This is 
America's Tax Code, all 24 pounds of it. Paperback. Think how heavy it 
would be for hard cover. It would take more than 18 days nonstop to 
read the Tax Code. In fact, it takes the average taxpayer 13 hours to 
gather and compile the receipts and forms to comply with the code. It 
costs Americans $160 billion a year to comply with the code, let alone 
the taxes Americans pay. This complexity in the code is eroding 
confidence in our economy and creating uncertainty for America's 
families and businesses.
  Clearly, the Tax Code is broken. That is the problem. It is a serious 
one. The solution calls for a more simple, more fair Tax Code, one that 
will allow the economy to grow and to create jobs. For the past few 
years, Senator Hatch and I have been working closely with all of the 
members of the Senate Finance Committee to reach that goal of 
comprehensive tax reform. We have held more than 30 hearings. We have 
heard from hundreds of experts about how tax reform can simplify the 
system for families, help businesses innovate, and make the United 
States more competitive.
  The PRESIDING OFFICER. The Senator from Utah.
  Mr. HATCH. Mr. President, I want to thank my friend from Montana for 
all the hard work he has done with regard to the Senate Finance 
Committee and of course the tax problems we have in this country. He 
has been truly dedicated to reforming our Nation's Tax Code and truly 
dedicated to doing it in a bipartisan manner, which is something I very 
much appreciate.
  Our work together is starting to pay off. Tax reform is building 
momentum. Over the past 3 months we have issued 10 bipartisan options 
papers that detail reform proposals in every area of the Tax Code. The 
full committee has met on a weekly basis to discuss these options. We 
have made tremendous progress. We are now entering the home stretch, 
all of this under the leadership of Senator Baucus.
  Senator Baucus and I are here today to call on all of our 
colleagues--all of our colleagues--in the Senate to now provide their 
input to help us get tax reform over the finish line. We have a 
historic opportunity to do tax reform this Congress, to make the code 
simpler and fairer for the people we serve.
  We are determined to make it happen, but we need every Member's 
participation. In order to make sure we end up with a simpler, more 
efficient, and fairer Tax Code, we believe it is important to start 
with a blank slate, a Tax Code without all of the special provisions in 
the form of exclusions, deductions, credits, and other tax preferences 
that some refer to as tax expenditures.
  Mr. BAUCUS. Mr. President, I might say this blank slate is not, of 
course, the end of the discussion. You do not clear the decks and stop. 
Some of the provisions in the code obviously serve very important 
objectives. That is why they made it there in the first place. Some we 
will need to keep, clearly. Why? To make sure the Tax Code is at least 
as progressive after tax reform as it is today.
  I want to emphasize this approach is just a starting point. It is not 
a proposal. This is a good, fair, balanced way, a good-faith way, of 
including all Members of the Senate to get started. We believe it is 
going to lead to a solution, kind of the way Bertrand Russell 
suggested: You have to state the problem the way that it is going to 
lead to a solution. We think this is a good way to get to that 
  Mr. HATCH. Mr. President, we both believe some existing tax 
expenditures should be preserved in some form, but the Tax Code is also 
littered with preferences for special interests. To make sure we clear 
out all of the unproductive provisions and simplify the Tax Code, we 
plan to operate from an assumption that all special provisions are out 
unless there is clear evidence that they, No. 1, help grow the economy; 
No. 2, help make the Tax Code fairer; and, No. 3, effectively promote 
other important policy objectives.
  Mr. BAUCUS. Now that we have a blank slate, we are asking all 
Senators; that is, all Senators, Senators on the committee, Senators 
off the committee--to submit detailed legislative proposals; that is 
tax expenditures, the credits, the deductions, exclusions, which they 
think should be added back that meet the test for growth and for jobs, 
as well as any other provisions Senators might have in mind that they 
think should be added or repealed, that they think make sense or other 
reforms they think make sense.
  In order to help guide our colleagues' submissions, we have released 
some rough estimates the Joint Committee on Taxation and our staffs 
have been working on. These estimates show how much the rates would 
rise, for example, if we add back tax expenditures and keep the current 
level of progressivity compared to a blank slate.

  We put this out today. Why? Because we wanted everybody to know there 
is a tradeoff involved; that is, when you keep tax expenditures, there 
is going to be an increase in rates, certainly compared with what 
otherwise we start with. The more tax expenditures there are, the less 
revenue there is for a rate reduction and deficit reduction, and the 
more complicated our Tax Code will end up being.
  Mr. HATCH. We are giving Senators 1 month to send us their 
submissions. We will give preference to bipartisan proposals. This 
input will make up the foundation of the committee's tax reform 
proposal. We want to ensure the bipartisan bill we introduce has broad 
input and buy-in from across the Senate. We cannot let comprehensive 
tax reform get bogged down in politics. Only a bipartisan bill can 
become law.
  Mr. BAUCUS. We also need to remember, this is not just about tax 
expenditures. There is much more to it than confining our discussion to 
tax expenditures, because at its core tax reform means making the Tax 
Code more fair, easier to deal with for families all across our 
country. There are a lot of loopholes, on the other hand, in the code 
we should get rid of. People who can afford fancy tax advisers should 
not be able to take advantage of loopholes regular Americans do not 
have available to them. As chairman and ranking member of the 
committee, we are determined to complete tax reform this Congress. We 
cannot afford to be complacent. Improving the Tax Code provides a great 
opportunity to spark economic growth, to create jobs, and make U.S. 
businesses more competitive.
  I might add at this point, other countries are modernizing their 
codes. We are going to be left in the dust if we do not modernize ours. 
We need to hear from our colleagues as to what provisions they think 
will help us reach those goals.
  I have a great partner in this mission, my good friend Senator Hatch. 
I will keep communicating and working with the administration and the 
Senate leadership as we move forward.
  Working together we can get this done. I believe strongly that 
nothing of consequence ever happens around here if one person tries to 
accomplish something alone on his or her behalf; rather, matters of 
consequence are accomplished when people work together. We clearly want 
a matter of consequence to pass here. We will do so by working 
  Mr. HATCH. It is a privilege to work with Senator Baucus, our 
chairman, on improving the Tax Code, on updating it for the 21st 
century. This provides a great opportunity to give families certainty, 
spark economic growth, create jobs, and make U.S. businesses more 
competitive. If it is done right, it can provide America with a real 
shot in the arm.
  My friend from Montana began this discussion with a quote. I feel it 
only appropriate to conclude with one as well. Abraham Lincoln said, 
``Determine the thing that can and shall be done, and then we shall 
find the way.''
  We are determined to craft a fairer and simpler Tax Code. Working 
together, I think we can find a way.
  I want to compliment the distinguished Senator from Montana for the

[[Page S5483]]

work he has already done, for the work the committee has already done, 
the hearings we have held, the meetings we have held on these options 
papers, and for his general zeal in leading the charge here on this 
question of shall we or shall we not reform our Tax Code.
  If you look at that stack of Tax Code books that stood this high, you 
realize it is time to simplify this doggone mess. I think we can do it, 
but it is going to take a bipartisan effort. It is going to take all of 
us working closely. It is going to take everybody on the Finance 
Committee doing what it takes to bring tax reform alive.
  In 1986, it took 3 years to get the 1986 bill done. I do not think we 
have 3 years. I think we are going to have to do it now or it will not 
be done.
  I want to personally express my admiration and friendship to the 
distinguished Senator from Montana. I intend to help him every step of 
the way.
  I believe we have a tremendous contingent of Senators on the Finance 
Committee, as good as any time that committee has been staffed in the 
history of the Finance Committee. The Senators we have there are all 
solid. They are all fully embracing this in the sense of trying to come 
up with the very best reform we can.
  I have to say we have the best staff that committee has ever had as 
well. That is saying something, because it has always had great staff. 
The Finance Committee has always been one of the greatest committees in 
the Congress, as it should be. I have to say, under the leadership of 
the distinguished Senator from Montana, it is no exception this time. 
We have great people on the staff. We intend to see if we can get this 
  I want to thank my colleague for his great work.
  Mr. BAUCUS. I thank Senator Hatch. It is mutual.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from New Hampshire.