A top official at the U.S. Chamber of Commerce said Thursday that the nation’s largest business lobby would support eliminating most of the tax loopholes obtained by large corporations to move toward comprehensive tax reform that resulted in lower rates.
“What the business community would like to see is a significant restructuring of the tax systems and the entitlement programs,” said Thomas Bell, the Chamber’s chairman. “The problem we have at the Chamber with any issue like this is that many of our members have their own specific tax accoutrements that they love and want to hang on to. And whereas they all agree that we’ve got to do something — ‘just don’t do anything that affects me.’”
But Bell, speaking at on a panel discussion hosted by CNBC, said that the Chamber sees a need for the business sector to accept some pain as part of a society-wide effort toward reducing the federal budget deficit and national debt.
Many see tax reform that expands the number of taxpayers but lowers corporate and individual rates as the key way to increase revenues, complementing what most agree are necessary spending reductions.
“This is the first time that the Chamber is taking the position as an organization, and our members are generally receptive of: ‘OK, we get it. We’ve got to look at the longer term. We have to look at a significant restructuring of how we derive the revenues that we derive, and we’ve got to figure out how to get our spending down below 20 percent, because I think it’s been demonstrated that’s about all you’re going to get out of tax revenues is 20 percent of GDP,” Bell said.
Sen. Mark Warner, Virginia Democrat, was also on the panel, along with Federal Reserve Chairman Ben Bernanke and Federal Deposit Insurance Corporation Chairman Sheila Bair.
Warner, who is a key lawmaker involved in drafting legislation modeled on the recommendations of President Obama’s deficit commission from December, welcomed Bell’s comments.
“We won’t get this done unless the business community is saying, ‘We’re in for our share of the hard choices as well,'” Warner said.
He said that the principle applied to every sector of society, including those who don’t want Medicare benefits touched and those who oppose raising the retirement age for Social Security. Warner said that the deficit commission’s proposal to raise the age to 68 around 2050 and 69 around 2075 — which drew an outcry from organized labor and liberal groups — was “not aggressive at all.”
“We’ve got to have a little more truth in everybody,” Warner said.
Warner said that tax reform should be paired with a “dramatic cut back on spending.”
On corporate taxes, Warner said that the current rate of 35 percent should be reduced to 25 percent, but that by closing loopholes, that would still be an increase for many large corporations.
“The effective rate, though, for a lot of large corporations is low 20’s. So there’s going to be some winners and losers,” he said. “I think they only way you get there is with a bit of shared sacrifice from everybody. Everybody’s got to feel like they’re doing their part.”