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Reid: Time to reform the tax code

By KIM DIXON
January 9, 2011

The U.S. tax code is “ripe” for reform and fixing it will be a top priority for Democrats this year, Senate Majority Leader Harry Reid said on Thursday.

Both parties agree the voluminous tax code needs a rewrite and the Democratic-led Senate and Republican-led House of Representatives will begin hearings soon on an overhaul.

“I do believe the country is ripe for tax reform,” Reid said at a news conference. “Our tax system is broken and needs to be fixed.”

Republican Senate leader Mitch McConnell said his party also backed an overhaul, but that President Barack Obama needed to take the lead.

“We all know the tax code is a disaster and any effort to simplify the tax code, to get the rates down, to make it more fair, I think we’d be open to discussing that,” McConnell said.

Treasury Secretary Timothy Geithner plans to meet next week with chief financial officers of major companies to talk about corporate tax reform in particular, a Treasury spokeswoman said.

Obama is making overtures to corporate America to mend fences after bruising battles over healthcare and financial reform during the Democratic president’s first two years in office.

Obama has said he is interested in finding ways to cut the 35 percent top corporate rate.

Analysts say Obama needs to push hard if tax reform is to have a chance of advancing. Most believe the next two years of hearings and debate will lay the groundwork for a potential overhaul if Obama is elected to a second term.

Corporate tax reform efforts have been under way in Congress and the White House for years,” MF Global analyst Anne Mathias said. “2011 may finally be the time to get a deal done, but our odds are still under 50 percent.”

The Chamber of Commerce is drafting fundamental principles on corporate tax reform, which will include a lower tax rate but preserve several cherished tax breaks for companies.

Taxation of foreign income will be one key sticking point. Obama has several times proposed limiting deferral of taxes on income earned abroad, which could cost multinational companies tens of billions of dollars.

A host of deficit-fighting proposals have proposed cutting corporate tax incentives, such as a deduction used by oil and gas companies for domestic production.

Copyright © 2011 Reuters

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3 Responses to Reid: Time to reform the tax code

  1. Almandine

    January 9, 2011 at 1:23 pm

    Why income taxes? Why punish productivity?

    Why not tax consumption instead… NOT in addition?

    Hold onto your wallets.

  2. Carl Nemo

    January 10, 2011 at 4:19 pm

    Do we really want Harry and his criminally disposed brethren tinkering with the tax code?

    Harry’s got his nose buried up Chinese butt so far that he hasn’t seen U.S. sunlight in years.

    We’re suffering mightily as a nation, so he cozies up to the Chinese for a solar farm to constructed in Nevada. There’s a host of cutting edge solar panel companies in this country, but no, he has to facilitate the “Red Chinese” posing as reborn capitalists to construct a major project on Nevada soil.

    http://www.sodahead.com/united-states/harry-reids-great-china-connection/question-1380769/

    Too bad his opponent was such a flake in the recent elections, so now we must suffer six more years of he and his brethren selling our remnant manufacturing base to the Chinese or anyone else, all for a few dollars more.

    With reps like him meddling with the tax code, rest assured “We the People will get screwed bigtime while the corporations, foundations and trusts will do even far better than they are now.

    Besides the income tax is not simply about taxation, but in depth surveillance of our citizens most private matters concerning their businesses, income, so-called write-offs which disclose their ‘feeding habits’ and movement under the now triple canopy of emerging tyranny across this land.

    Carl Nemo **==

  3. Carl Nemo

    January 11, 2011 at 2:11 am

    ” for a solar farm to constructed in Nevada.” : correction

    They’re constructing wind farms, but what the hell, why not solar farms too. : ))

    I just love the Chinese and everything they do for us via U.S. based Walmart along with U.S. tax percs courtesy of Congress and the likes of Harry Reid & Co.

    Carl Nemo **==