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Sens. Hatch, Baucus look to rewrite tax code from scratch, promise 50 years of secrecy

Published: Friday, July 26 2013 3:35 p.m. MDT

In this Feb. 2, 2011 file photo, Sen. Orrin Hatch, R-Utah speaks on Capitol Hill in Washington.

Jacquelyn Martin, AP

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Sens. Orrin Hatch and Max Baucus are looking to rewrite the tax code by wiping the slate clean and having supporters of tax preferences justify their continuation, but their plan may rely on both secrecy and the Montana Democrat's ability to resist revenue pressures.

"This is the right principle, both as tax policy and reform politics," The Wall Street Journal said at the time in an editorial. "The goal of tax policy should be to meet the revenue needs of the government with the lowest rate possible and the fewest economic distortions. Starting with a blank slate helps to show how low the rate can be with a tax code unencrusted by the barnacles of the Beltway."

"This blank-slate is not, of course, the end of the discussion," Baucus and Hatch said in a statement. "Indeed, we both believe that some existing tax expenditures should be preserved in some form. But the tax code is also littered with preferences for special interests."

The two senators asked their colleagues to submit legislative language or detailed proposals for what tax expenditures and other provisions should be added back to the reformed code, emphasizing that anything added back in should help grow the economy, make the tax code fairer or promote other important policy objectives.

Senators had until today to submit their proposals.

The Hill reported Wednesday that Hatch and Baucus have promised the other senators 50 years of secrecy in exchange for their suggestions on what deductions and credits should be preserved in a rewritten tax code.

The promised confidentiality is an attempt to prove to others senators that secrecy in the process is a priority.

"The letter was done at the request of offices to provide some assurance that the committee would not make their submissions public," an aide told The Hill. "Sens. Baucus and Hatch are going out of their way to assure their colleagues they will keep the submissions in confidence."

The 50-year window is standard operating procedure for sensitive materials, the aide also said.

Bloomberg reported Friday that Baucus may prove to be the true key in tax reform as he comes under pressure from Democrats to include almost $1 trillion in new revenue in a rewritten tax code, and pressure from Republicans to resist.

Senate Majority Leader Harry Reid told reporters Thursday that any revisions to the tax code should use the Senate budget, which calls for $975 billion in additional tax revenue over the next decade, as a starting point. He also told Roll Call that he had no intention of reading the written request from Baucus and Hatch regarding their proposal.

"I'm not going to be involved in this. I'm not on the committee, I'm not going to do it. I'm not even going to consider it," Reid said. "I frankly haven't read the letter, don't intend to."

Sen. John Cornyn, R-Texas, said an attempt to insist on tax increases will end plans to rewrite the tax code.

"That kills it," he told Bloomberg. "We're not going to do that."

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