Tax coalition: Targeted measures aren’t reform

A corporate coalition seeking a broad revamp of the tax code is warning lawmakers to go big, or do nothing at all.

{mosads}The Reforming America’s Taxes Equitably, or RATE, Coalition sent a letter to all members of Congress on Monday, insisting that 2015 could finally be the year for the overhaul of the tax code long sought by the business community.

But Elaine Kamarck and James Pinkerton, the co-chairs of the coalition, also urged Washington to stay away from one-off tax maneuvers – like allowing companies to bring offshore profits back to the U.S. at a reduced rate, potentially to pay for infrastructure improvements – that fall short of the broader revamp they’re seeking.

“These proposals should not be confused with tax reform as they do nothing to simplify our tax code or bring tax rates down to a globally competitive rate – actions that would benefit all businesses that create jobs and are looking for ways to invest and grow,” Kamarck and Pinkerton wrote in the letter, obtained by The Hill. “Doing such would serve only as a distraction that will make accomplishing tax reform harder to achieve in the long-run.”

While Kamarck and Pinkerton are talking up the chances for tax reform in 2015, many other tax observers are less optimistic.

Rep. Chris Van Hollen (D-Md.) is poised to unveil proposals on Monday that seek to offer broad tax relief t the middle-class, while raising taxes on Wall Street. Those proposals have little chance in a GOP-controlled Congress, but also illustrate the divide that remains between the two parties on taxes.

Democrats themselves are divided about whether to pursue tax reform that only helps businesses, or to rewrite the code for individuals as well. As for Republicans, GOP lawmakers didn’t coalesce behind a draft tax reform proposal from the House’s top tax writer, now former Rep. Dave Camp (R-Mich.), last year.

Still, the RATE Coalition, whose more than 30 corporate members include AT&T, Boeing and Ford, says a tax reform that lowered the U.S. corporate tax rate from the highest in the industrialized world would be a great help to the current economic recovery. Such a move would also help curb the offshore tax deals known as inversions, Karmarck and Pinkerton wrote.

“In the past, the U.S. has taken pride in being ahead of the curve on economic issues,” Kamarck and Pinkerton wrote. “It’s about time we caught up with our competitors on this vital issue as well.”