Lobbyist sees momentum for federal tax reform

Congress almost certainly will address major tax reform in 2013, says John Kelly Jr., who directs tax policy work for Cornerstone Government Affairs. However, legislation may not reach President Barack Obama’s desk this year. Reform will likely involve lower tax rates and fewer exemptions. Obama has proposed lowering the corporate rate to 28%, but beyond that it’s hard to know where the president stands on specifics, Kelly says. The Senate confirmation hearings for Jack Lew, Obama’s choice for Treasury secretary, could be instructive. Congress has other immediate fiscal concerns, such as the automatic spending cuts that were postponed in the “fiscal cliff” deal but are scheduled to take effect in March. But Sen. Max Baucus, the Montana Democrat who chairs the Senate Finance Committee, and Rep. Dave Camp, the Michigan Republican who chairs the House Committee on Ways and Means, both support “tearing the tax code out by the roots,” Kelly says. He adds almost everyone on Capitol Hill agrees the tax code needs fundamental reform. There will be controversy over which tax breaks to eliminate and whether changes should be revenue neutral, he says, adding that he sees more momentum than ever toward finding a way to collect taxes on online sales. Cornerstone has six offices, including one in Baton Rouge and one in Washington, D.C. —David Jacobs