The latest Bloomberg Businessweek offers more evidence that North Carolina state government is not alone in the need to pursue tax reform.
Max Baucus, a Democrat from Montana, and Orrin Hatch, a Utah Republican, are working on the first rewrite of the tax code since 1986. Instead of revising the existing tax law, they’re taking what they call a “blank slate” approach. They proposed sweeping away the tax code’s thousands of loopholes, then asked their colleagues to submit written requests for the deductions they want put back in, assuring them that the requests would be kept private. The response: silence. Senators didn’t want word to leak that they’d supported special tax breaks.
It’s easy to see why. Many of the loopholes that have crept into the law—for oil companies, private equity managers, Hollywood—are hard to defend. There’s no way to pretend they help kids, or create jobs. They just go to people and corporations that donate money. So to get lawmakers to hand over their wish lists without fear of reprisals from voters, lobbyists, and other senators, the committee’s staff has come up with a novel way to let senators do their donors’ bidding in secret. In a July 19 memo obtained by Bloomberg BNA, the committee assured senators that their loophole requests will be locked up—physically locked up—for 50 years.
According to the memo, just two paper copies of the requests will be stored in safes on Capitol Hill. Two digital copies will get filed in password-protected computers. Only Baucus, Hatch, and 10 staff members will have access to the documents. Each copy will be given a unique ID number so it can be tracked. Eventually the papers—stamped “Committee Confidential”—will be secured at the National Archives in a special vault, separate from the committee’s other records, until Dec. 31, 2064.
