Depending on who you speak with in Washington, tax reform is definitely going to happen this year ... or it is definitely going to happen next year. The messages coming from both sides of the aisle are mixed. Though many questions remain unanswered, one thing is clear: The time for comprehensive tax reform is now, but the window for getting it done may be running out.
The United States Congress' tax-writing committees, in the House of Representatives and the Senate, have made tax reform a priority over the last several years. Countless hearings have taken place in both the Ways and Means Committee in the House and the Finance Committee in the Senate. These have ranged from how to deal with international taxation to how to best treat pass-through entities during comprehensive tax reform.
Aside from hearings, working groups aimed at specific portions of tax reform have been called and discussion drafts on key tax reform proposals have been released. The leaders of the committees, Rep. Dave Camp (R-Mich.) and Sen. Max Baucus (D-Mont.) also have personal investments in the cause of comprehensive tax reform.
Camp is term-limited as chairman of the Ways and Means Committee and has staked his legacy on the reformation of the tax code. Baucus is expected to face a difficult path to reelection in 2014 in his home state of Montana.
Where Things Stand Now
The persistent problem in Washington, D.C., especially over the last decade, is the inability of both parties to work together. Both Republicans and Democrats, especially in the House of Representatives, can barely stand to speak to one another, let alone work together on something as complicated as reforming the tax code. There are differing opinions on how to reform the tax code and those opinions run deep into the ideologies of both political parties.
And though both Camp and Baucus have held several joint hearings and seem to be willing (at least at the present time) to work side-by-side to achieve comprehensive reform, it is unclear if the two chairmen will be able to gain agreement within their own caucuses.
The Speaker of the House, John Boehner (R-Ohio), remains committed to comprehensive tax reform. As a way of showing his sincere interest in achieving reform, Boehner has reserved bill number H.R. 1 for tax reform legislation, a signal that he considers it his highest priority. Chairman Camp has developed a bipartisan task force comprised of 11 adhoc subgroups that will cover all portions of comprehensive tax...