Senators’ ‘blank slate’ submissions trickle out

A pair of top senators closed a month-long outreach effort for tax code suggestions Friday, after facing deep skepticism from colleagues and making an unprecedented offer to protect confidentiality.

More than a half dozen senators, including members of both parties, released written suggestions to Finance Chairman Max Baucus (D-Mont.) and Sen. Orrin Hatch (R-Utah) on Friday, joining a handful of lawmakers who publicized their suggestions earlier in the week.

{mosads}Baucus has said he plans to mark up a tax reform bill in the fall, and that he plans to take the submissions into account as he works toward a bipartisan bill.

But the suggestions senators released Friday were often general and painted with a broad brush – not the “legislative language or detailed proposals” about which tax breaks should remain in a blank code that Baucus and Hatch had asked from their 98 other colleagues.

Since their June letter, Baucus and Hatch have also seen more than a couple senators keep their process at arm’s length – not least, Majority Leader Harry Reid (D-Nev.) and Minority Leader Mitch McConnell (R-Ky.).

Reid told reporters Thursday that he wouldn’t take part in the “blank slate” process – that he had, in fact, never actually read Baucus and Hatch’s letter. The Nevada Democrat added that the $975 billion in new revenues included in the Senate budget should be a starting point for Baucus.

{mosads}McConnell, meanwhile, has repeatedly said that Democrats view tax reform as a stalking horse for tax increases.

Other senators have also expressed concern about the revenue divide, to the point of questioning whether the blank slate process made sense while that issue is unsettled. In some cases, senators were also worried about their confidential submissions leaking out – to the point that Baucus and Hatch have promised they’ll remain locked away until at least the end of 2064.

The senators who released blank slate submissions on Friday include:

Sen. Jay Rockefeller (D-W.Va.) – The second-ranking Democrat on the Finance Committee, Rockefeller noted to Baucus and Hatch that he’d already met with them personally more than a couple times since 2011.

To that end, Rockefeller noted that his key priority is rolling back income inequality. The West Virginia Democrat – who has openly said the blank slate gave too much power to Baucus and Hatch – also called for strengthening refundable tax credits, and called the $975 billion figure a “worthy goal.”

Sen. Mike Crapo (R-Idaho) – A member of the Bowles-Simpson commission, Crapo told Baucus and Hatch that tax reform should build on that framework – no more than three tax brackets, lower rates on capital gains and shielding offshore corporate income for taxation.

But Crapo, another Finance member, did not offer suggestions on which tax breaks should be chopped, and said that the best possible outcome would be a flat tax. Either way, the Idaho Republican added, tax reform should be revenue-neutral.

Sen. Ben Cardin (D-Md.) – Cardin, also a Finance member, did not publicly release a letter, but did outline several priorities in a Friday statement. Among them: Increasing or keeping the current progressivity in the code; incentives for clean energy; protecting tax breaks for retirement; and even a possible progressive consumption tax.

Sen. Mike Enzi (R-Wyo.) – In his letter, Enzi notes that he’s the only accountant on the Finance Committee. The Wyoming Republican also suggested that Baucus and Hatch take a look at two of his previous pieces of legislation, one that updates tax filing deadlines and another that reforms the global tax rules for corporations.

Sen. Bill Nelson (D-Fla.) – Yet another Finance member, Nelson told Baucus and Hatch that each tax break should expire in 10 years or less – unless lawmakers specifically vote to reup them. Such a setup, Nelson said, could keep new preferences benefitting special interests from sneaking into the tax code.

The Florida Democrat also takes aim at tax breaks for oil and pharmeceutical companies, and incentives for offshoring. But Nelson also stressed that not all tax breaks – the ones that benefit average taxpayers over special interests – are bad.

Sen. Joe Donnelly (D-Ind.) – Donnelly keeps it general in his three paragraph letter to Baucus and Hatch, calling for protecting the middle class and encouraging business investment. The Indiana Democrat does say that any tax reform should raise revenue.

Sen. Bernie Sanders (I-Vt.) – Sanders, among the more liberal members of the Senate, pointedly declined Baucus and Hatch’s offer to protect confidentiality. “Given the fact that my suggestions represent the interests of the middle class of this country and not powerful corporate special interests, I have no problem with making them public,” Sanders said.

The Vermont senator also calls for a Wall Street speculation tax, anti-offshoring measures, a carbon tax and higher capital gains and dividends rates for the wealthiest.

Sen. Chris Murphy (D-Conn.) – Murphy’s letter broadly calls for protecting the middle class and raising revenue. The Connecticut Democrat notes that a family making $200,000 a year can be considered middle class in his state. But sitting next door to Wall Street, he also suggests that policymakers consider whether capital gains should be taxed as ordinary income.

Infrastructure and retirement savings, on the other hand, should be incentivized in the tax code, Murphy says.

Other senators, like Tammy Baldwin (D-Wis.) and Angus King (I-Maine), have told The Hill they were also make their submissions public. Sens. Jeff Flake (R-Ariz.) and Marco Rubio (R-Fla.) released their letters earlier this week.

Rubio’s letter chides senators who want to use tax reform to either raise taxes or redistribute income, and calls for any bill to be marked up in committee and go through an open amendment process on the Senate floor.

A spokesman for Sen. Barbara Boxer (D-Calif.) told The Hill that Boxer’s letter called for protecting a range of popular – and expensive – tax breaks: The deductions for mortgage interest, charitable contributions and state and local taxes, as well as the credit for research and development. Boxer also seeks to protect entitlement programs, incentivize renewable energy and education, and fund highway programs.

Katie Tank and Meredith Bentsen contributed.