U.S. tax writers to propose a controversial tax code revamp

WASHINGTON (Reuters) - The top Democrat and Republican tax-writers in the Senate will propose a revamp of the tax code on Thursday that challenges their colleagues to justify retaining some of the country's most cherished tax breaks.

Democrat Max Baucus, chairman of the Senate Finance Committee, and top panel Republican Orrin Hatch, will challenge fellow lawmakers in a "dear colleague" letter, according to a senior Republican aide, who could not speak for attribution.

They will propose to cut tax rates with most tax breaks wiped out and ask their colleagues to justify putting them back in.

By proposing such a slimmed-down tax code, Baucus and Hatch would force fellow senators to make their case for retaining popular breaks, including the home mortgage interest deduction and the tax break on employer-paid health insurance.

Baucus and his counterpart in the U.S. House of Representatives, Republican Dave Camp, are working on proposals to overhaul the entire tax code, with Camp pledging to pass legislation this year out of his Ways and Means Committee.

Camp has issued several proposals dealing with specific parts of the code, including international and financial products taxation, and is expected to introduce legislation first.

The work in the Senate has proceeded at a slower pace.

Democrats and Republicans largely concur on the need for a revamp of the tax code, but differ on whether new revenue should be raised and which tax breaks should be scrapped for lower rates.

(Reporting by Kim Dixon. Editing by Andre Grenon)

Source: http://news.yahoo.com/u-tax-writers-propose-controversial-tax-code-revamp-225950444.html

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