The Campaign to Fix the Debt will endorse an approach to tax reform Thursday that begins by wiping out all existing tax breaks, forcing lawmakers and industries to make the case for why their favorite breaks should be included in a reformed tax code, an idea championed by both leaders of the Senate Finance Committee, Chairman Max Baucus, D-Mont., and ranking member Orrin Hatch, R-Utah.
In a memo to be circulated Thursday, the group will argue that the so-called blank-slate approach will allow the top individual and corporate rates to be as low as 23 percent and 27 percent, respectively, without increasing the deficit.
And it will force advocates to push for their favored tax breaks to be included instead of putting the onus on reformers to justify their removal.
"Our outdated and inefficient tax code is in dire need of structural reform—on both the corporate and individual side," the campaign's Jon Romano said. "A 'Blank Slate' or 'Zero Plan' approach to tax reform—one that cuts out all specific tax preferences from the code and makes lawmakers justify putting them back in—is a great place to begin the process."
The group, which includes veteran policymakers and corporate executives, will also release its tax-reform principles, which are:
- Tax reform should promote economic growth and help reduce future deficits.
- Tax reform should begin with a "blank slate" by eliminating all corporate and individual tax preferences that do not pass a cost-benefit analysis, recognizing that each restoration must be accompanied by a tax rate increase.
- Tax preferences that are restored should be made more efficient and cost-effective to maximize return on investment for the American taxpayer.
- Tax reform should lower tax rates for individuals, corporations, and small businesses.
- Tax reform should promote fairness and protect the most vulnerable in society.
- Tax reform is a complement, not a substitute, for entitlement reforms. Policymakers must continue to pursue structural reforms to slow the rate of growth of Medicare, Medicaid, and Social Security in order to fix the debt and make those programs sustainable.
This article appears in the July 25, 2013, edition of NJ Daily.