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Overhauling the U.S. tax code may not have the full attention of President Barack Obama or congressional leaders, but Senate Finance Committee members aren't letting up on their efforts.

In fact, they're operating on a necessarily aggressive schedule through working groups focused on different parts of the code to stay ahead of 2016 presidential politics. The groups are meeting regularly through the end of May, at which point they will tell Senate Finance Committee Chairman Orrin G. Hatch (R-Utah) and ranking member Ron Wyden (D-Ore.) what changes to make.

But all of this is happening in a bit of a vacuum, a top committee aide said at a Federal Bar Association conference on March 6.

“It's not the No. 1 priority for the key political actors,” said Mark Prater, chief tax counsel and deputy staff director on the majority side. “So all we can do at our level, and our bosses can do, is make the case that this is an important objective or goal, and we'll continue to do that.”

Inaction would prove perilous economically and beyond, he said, pointing to disjointed taxation of businesses domestically and internationally as well as complexities tied to taxing individuals.

“There will be consequences if we don't get to it,” Prater said.

Input Opportunity

He said the working groups are making progress, and his counterpart on the minority staff, Todd Metcalf, said their meetings are better attended than some of the committee's full hearings.

And as the working groups move forward, they will continue meeting with outside interest groups as they have done to date.

Those outside groups will soon have another option to provide input. A pending announcement will detail how they can weigh in with the working groups, Metcalf said.

“There will be a way to get, for interested parties, to send us input as well,” he said.

The process will continue to focus on comprehensive changes to tax law that Hatch and Wyden prefer, inclusive of individual, business and corporate taxes, Prater and Metcalf said, even if most attention for others has centered on the business side. And for all the criticism of Obama's general absenteeism on tax proposals to date, both Prater and Metcalf said they took a positive signal from international tax suggestions in the president's budget blueprint for the 2016 federal fiscal year.

“They're trying to put some meat on the bones,” Metcalf said.

Dynamic Refinement

Also speaking at the conference, Joint Committee on Taxation Chief of Staff Thomas Barthold said his staff provides background policy and legal information to working group members just as was done with past working groups on the House Ways and Means Committee.

Along those lines, the JCT released a report (JCX-49-15) March 6 outlining sources of complexity in the tax code in advance of a March 10 Finance Committee hearing on ideas to simplify the tax code.

On the topic of dynamic scoring, Barthold said the JCT is continuing to refine the process. New House rules this Congress mandate such scores for tax bills expected to have a sizeable revenue impact, going beyond a prior rule that dates to 2003 to require a dynamic analysis of certain tax bills to demonstrate a range of possible outcomes from changing a law.

“We've developed models we continue to improve upon,” Barthold said. “We admit that there's uncertainty. There's uncertainty in the microeconomic models.”

Two other staffers scheduled to speak at the conference, the House Ways and Means Committee's majority chief tax counsel George Callas and minority chief tax counsel Karen McAfee, didn't appear because of weather-related difficulties.


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