Lowering Corp Taxes is Key to a Higher S&P 500 ..

WASHINGTON (Dow Jones)--The Senate Finance Committee next week will embark on what is likely to be an exhaustive review of the U.S. tax code, as it hears from a quartet of former Treasury tax officials.

Sen. Max Baucus (D., Mont.), chairman of the Finance panel, plans to hold tax hearings throughout 2011, and aides say they could number as many as two dozen. 

It is partly a response to President Barack Obama's call for lower corporate tax rates and a simpler tax code. Many lawmakers and private-sector analysts predict much discussion, but little actual legislative action to re-shape the tax code prior to the 2012 presidential elections.

Nevertheless, the hearings promise the closest and most thorough look a congressional committee has given the tax code in years.

Five former assistant Treasury secretaries for tax policy will testify before the Finance panel on March 1: Fred Goldberg and Jon Talisman, who served in the Bill Clinton administration; and Mark Weinberger, Pam Olson, and Eric Solomon, who served under former President George W. Bush.

"Today there are just too many special benefits in the tax code for one industry or another," Baucus said in a statement. "We need to figure out how to get rid of loopholes and simplify the system, so we can lower tax rates and keep our economy growing."

"Our tax system is burdensome, overly complex and stifles American competitiveness. It needs to be reformed," said Sen. Orrin Hatch of Utah, the senior Republican on the finance panel.

Future hearings of the Senate Finance Committee will address such topics as how taxes impact economic efficiency and growth; tax code complexity; and distributional effects, or how the tax code impacts the rich, poor, and in-between, according to people with knowledge of the discussions.

In addition to those topics, some hearings are likely to break off segments of the code for the discussion: for instance, one could focus on taxes on the international profits of U.S. businesses, while another would focus on domestic corporate tax issues.

Aides cautioned that topics and approaches are still taking shape, as is the question of how frequently the hearings will occur.

-By Martin Vaughan, Dow Jones Newswires, 202-862-9244; martin.vaughan@dowjones.com

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(END) Dow Jones Newswires
February 22, 2011 19:30 ET (00:30 GMT)
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