Message to U.S.-based multinational companies: it is not too soon to lobby lawmakers on U.S. tax reform.
The messengers: former and current congressional tax staffers speaking at a meeting of tax executives in Washington, D.C., on Monday.
"Don't wait until we've decided what we are going to do (to come see us)," Senate Finance Committee tax counsel Jeff VanderWolk, who works for Democrat Max Baucus, chairman of that panel, told hundreds of tax officials from Fortune 500 companies at a Tax Executive Institute gathering in Washington today.
Although major action on tax reform is not expected until next year, aides are working behind the scenes on key issues from preventing erosion of the taxpayer base to rules for so-called pass-through entities, companies that file through the individual side of the tax code.
Jon Traub, a former aide to Republican Representative Dave Camp, chairman of the House of Representatives Ways and Means Committee, said with the near constant election cycle, there might only be a short opening after the Nov. 6 congressional and presidential elections to complete a revamp of the tax code.
"The window that may open may only be open for five or six months," Traub said, explaining why staff members are vetting key issues at this early stage.
Big issues remain, aides said, including basic agreement on how big government should be and how changes to the tax code will be distributed among different income groups.
Discord on that issue was underscored by a disagreement among the staffers about whether low-income taxpayers need to pay more in federal income taxes.
Due to various credits and deductions put in place by both Democrats and Republicans, nearly half of low-income taxpayers pay no federal income tax, although they still pay sales and payroll taxes.
"That is a further barrier to consensus," said House Ways and Means counsel for Democrats, Michael Hauswirth, who indicated the tax code is skewed to the rich in large part.
Traub disagreed.
"Making the tax code more progressive than it is now when about half of Americans pay no income taxes is a tall ask," for Republicans, he said.
It is easy to be for tax reform when it is talked about in the abstract, said Hauswirth, "it is like motherhood and apple pie, everyone says they love tax reform."
That's until they need to make the hard choices about trade-offs.
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