HELENA – A panel advising U.S. Sen. Max Baucus on his plan to rewrite the nation’s tax code told him on Thursday that the government should maintain deductions that benefit the poor, small businesses, education, retirement savings and innovation.
Baucus is working with the chairman of the House, Ways and Means committee, Republican Dave Camp of Michigan, on a plan to get rid of many tax credits, deductions and loopholes viewed as unproductive. They also want to reduce tax rates.
Baucus said he hopes the effort will result in the first major change to the tax code since 1986. He believes the code is disproportionately difficult on small businesses.
The Democrat, retiring at the end of 2014, said one issue remains the way large corporations have been able to identify overseas tax havens and essentially pay no taxes. He said the overall complexity is also hurting the nation’s competitiveness.
“In what way should it be simplified? I hear generally it is way too complicated,” Baucus said.
The advisory council of business, farming and labor leaders said tax benefits for low-income workers and children are important to keep. They highlighted the earned income tax credit and child care tax credit as incentives that have helped the working poor stay out of poverty.
The panel also told Baucus that other important tax deductions include: expenses for small businesses, education, retirement savings and innovation incentives.
The panel said other issues, like incentives for research and development, at least need to be improved and simplified.
The panel said incentives for retirement savings are important, and perhaps even need to be expanded to encourage more to save for retirement.
sponsored According to two 2015 surveys, 62 percent of Americans do not have enough savings to handle an unexpected emergency, much less any long-term plans.