All eyes in the tax world are on Sen. Max Baucus (D-MT) through his role as Chairman of the US Senate Finance Committee. Why? “Taxmageddon” and the pending automatic tax hikes at the end of the year. How does it impact you here in Montana? The average tax increase in 2013 is estimated to be $3,713 per tax return in Montana.
Politico has the latest, noting that the Republican-led House will attempt a July vote to freeze all future tax rates:
Baucus, the chairman of the tax-writing Senate Finance Committee, said he was “making progress” on a detailed tax reform proposal that he vowed would get support from both Democrats and Republicans. He also called for a tax reform plan that would raise more revenue to lower the federal deficit.
“Deficits and debt are not just a spending problem,” Baucus said Monday in a speech at the Bipartisan Policy Center. “Revenues as a share of GDP over the past few years are the lowest they have been since World War II. We simply don’t raise enough revenue.”
In addition to the automatic tax hikes, automatic spending cuts will also happen, as The New York Times reports:
Because Republicans could not win enough votes for permanent tax changes in 2001 and 2003, they used parliamentary maneuvers to enact the tax cuts, with an expiration date at the 2010. Rather than reach a permanent resolution then, President Obama and Congressional leaders punted the issue in December 2010 for two more years.
The automatic spending cuts were mandated last August as a backup plan if negotiations in Congress on long-term deficit reduction failed. They did.
About $100 billion needs to be found to cancel the first round of defense cuts, Mr. Kyl said. “Democrats want taxes to be a part of that,” he said in an interview. “Well, we think that’s a bad idea, but let’s sit down and talk.”
So, how will “Taxmageddon” impact those of us here in Montana? The conservative Heritage Foundation has this:
Baucus spoke earlier this week, with a much anticipated speech carried by C-SPAN. Bloomberg News had this earlier preview:
The speech will be seen as noteworthy if Baucus provides details, said Michael Linden, director of tax and budget policy at the Center for American Progress, a Washington group aligned with Democrats.
“Any specifics at all would be appreciated,” he said. “Which tax expenditures are most in need of reform? Which ones are not? How should we reform them?”
Did Linden get the specifics he was looking for? We’d have to ask him to find out. However, C-SPAN did make this note:
Senate Finance Committee Chairman Max Baucus Monday did not reveal any details about a his ideas for changing the U.S. tax code, but he did say his committee is “making progress” on a proposal.
Click below to watch video of Sen. Baucus’ speech.