Deficit commission bill will start out free of all tax deductions and loopholes, Chambliss says

Chambliss made clear that despite his long record as a reliable fiscal conservative, he is willing to defy the conservative shibboleth that tax increases dare not be mentioned.

“I’ve never voted for a tax increase and hope I don’t have to ever vote for one, but I do think it’s got to be a part of the mix,” said Chambliss, who has a 93.28 percent life time rating from the American Conservative Union.

Chambliss said that he and Warner — in their discussions about the $1.5 trillion budget deficit and the $14 trillion national debt — have talked about “the difficulty that he’s going to have with his side of the aisle on reforming social security and Medicare.”

“And he knows I’m going to have difficulty on the revenue side with folks on my side.”

“By the same token we both agree that if you don’t put both those issues on the table then this is not going to work. At the end of the day, everybody’s going to have to swallow hard and everybody’s going to have to understand that they’re going to have to make some sacrifices,” Chambliss said.

The deficit commission report recommended reducing six personal income tax brackets to three, and going to a system of 8, 14 and 23 percent. If the government were to retain a certain number of tax deductions and exemptions, the report said rates could go to 12, 22 and 28 percent. The current brackets are 10,15, 25, 28, 33 and 35 percent, and are scheduled to go up to 15, 28, 31, 36 and 39.6 percent if the Bush tax cuts expire in 2013.

The report also recommends lowering the corporate tax rate to 26 or 28 percent, up from its current 35 percent rate. Groups such as the Chamber of Commerce have said they support the elimination of the many tax loophole handouts to businesses with political connections, in conjunction with lowering the corporate rate.

But a recent report by Politifact showed that 91 percent of the $2.17 trillion in tax breaks over the last fiscal years went to individuals’ personal income taxes, with the rest going to corporations. By comparison, Politifact reported, the government took in only $1.85 trillion in revenues over those two years.

Chambliss also ridiculed the president’s proposal in his State of the Union address to freeze an eighth of the federal budget for five years, which would reduce proposed spending over the next decade by $400 billion.

“When the president talks about reducing spending by $400 billion – ‘Boy this is great’ – that’s nothing,” Chambliss said. “We’re talking about in our legislation reducing spending by $4 trillion. That’s the kind of reductions that you’re going to have to see.”