When the new Congress convenes in January there will be a new dynamic at play, with the Republican-controlled legislature squaring off against a Democrat administration. Clearly, there should be opportunities for Republicans to coalesce behind popular reforms that may have been stymied by Harry Reid’s Senate. Of these, tax reform is perhaps most sorely needed, but will the new Congress be willing to tackle the current tax code? Judging by the comments from incoming Senate Finance Committee Chairman Orrin Hatch, the outlook may be bleak.
While Sen. Hatch claims that tax reform is his "highest priority," he quickly downplays expectations for any massive overhaul of the current system. In the introduction to the Finance Committee’s recent report on comprehensive tax reform, the Senate’s top tax man writes: "It will involve balancing countless interests and making difficult choices among numerous competing priorities. In fact, despite the number of specific proposals that are out there, I don’t know that we’ve even scratched the surface on the degree of difficulty we face when it comes to tax reform." In other words, the lobbyists and tax lawyers that created the current morass that is the federal tax code will view any attempts at simplification and reform with a jaundiced eye.