What's the Impact of Baucus' Retirement on Tax Reform?
by Terri Eyden on
By Ken Berry
On April 23, Senator Max Baucus, long-standing chairman of the Senate Finance Committee, announced that he won't be seeking reelection in 2014. Instead, the Democratic senator from Montana intends to focus on helping to shape tax policy in our nation's capital until calling it quits for good. But will Baucus' announced retirement fuel or douse tax reform fever? It remains to be seen.
Baucus doesn't expect to take a passive role during his lame-duck status. "I'm not turning out to pasture because there is important work left to do, and I intend to spend the year and a half getting it done," he said in a prepared statement. "Our country and our state face enormous challenges – rising debt, a dysfunctional tax code, threats to our outdoor heritage, and the need for more good-paying jobs. I'm ready to roll up my sleeves and get to work."
The accolades for Baucus poured in from both sides of the aisle soon after the announcement. Former Senate Finance Committee chairman Chuck Grassley (R-IA) noted, "We ran the Finance Committee for ten years together, and every bill except for three or four was bipartisan. The Senate will be worse off as a deliberative body when Senator Baucus leaves." House Ways and Means Committee Chairman Dave Camp (R-MI), with whom Baucus has been meeting with on a weekly basis, said, "Max is a true legislator and friend for whom I have great respect, and I look forward to continuing our work to fix the tax code and protect and preserve our entitlement programs for current and future beneficiaries."
Tax reform certainly remains at the top of his agenda as Baucus prepares to leave the Senate. But it's unclear if his pending departure will help or hurt the prospects for meaningful changes in the complex and unwieldy tax code. Consider the following four points:
1. Baucus can now follow his conscience. He doesn't have to kowtow to Democrats who advocate higher taxes for the wealthy and fewer tax loopholes for corporations. This makes it more likely that Baucus will be able to work toward compromise with Camp, his Republican counterpart in the House.
2. Baucus would like orchestrate a triumphant climax to his career. He might see a significant overhaul of the tax code as his lasting legacy. With the end game in sight, Baucus will "go the extra yard" to try to make tax reform a reality.
3. Baucus can only do so much. Among Beltway insiders, Baucus wasn't viewed as an impediment to tax reform in a sharply divided Congress. He wasn't part of the problem, but he might be part of the solution. If he hasn't been able to move mountains before, there's no concrete evidence to suggest he'll be able to do it now.
4. Baucus will find his power receding. Although it may be liberating to free of partisan shackles, it comes at a price. Baucus' clout within his tax-writing committee, which was already somewhat suspect, will probably begin to wane. And his staff members, who are already starting their own job searches, may not be as committed to the task.
It's expected that Senator Ron Wyden (D-OR) will be named as the next Senate Finance Committee Chairman. Will he be picking up the tax reform torch from Baucus or extinguishing it? The next few months should be revealing.
- Tax Reform Writers in Congress Want to "Friend" You
- Federal Budget Talks Focus On – What Else? – Taxes
You may like these other stories...
The tax-filing season got off to a slow start because the IRS said it needed more time to gear up for this year’s returns. But now the pace has picked up considerably.About 40 percent of the returns expected to be...
Tax preparers have completed a lot of returns since the season began and will complete a lot more before April 15 – but that's just the beginning for many accountants and their clients. In the weeks and months that...
To read more articles by Eva Rosenberg, MBA, EA, click here and check out the Talk to TaxMama archive.Once upon a time, tax storefronts and offices in primarily non-English-speaking communities were able to make a very nice...
Upcoming CPE Webinars
BAR is an acronym for: Boundaries, Authority and Role. This simple tool will provide participants with a solid understanding of leadership essentials to improve their performance.
This material is designed to provide a start-to-finish overview of how to plan and complete high-quality small audits efficiently.
In this session Excel expert David H. Ringstrom, CPA shares numerous techniques that you can use to work with charts more efficiently.
Key Accounting and Reporting Issues for Nonprofits No. 1: Overview and Statement of Financial Position
This material focuses on non-profit organizations organization, accounting and reporting.