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FILE - In this May 12, 2011 file photo, Senate Finance Committee Chairman Sen. Max Baucus, D-Mont., left, and and the committee's ranking Republican Sen. Orrin G. Hatch, R-Utah, right, open a hearing on Capitol Hill in Washington. The Obama administration has embarked on an aggressive trade agenda that could lower trade barriers and increase exports to many of the economic giants of Asia and Europe. To make that a reality, though, it may first have to negotiate future trade policy a little closer to home, with Congress.

J. Scott Applewhite, Associated Press - Ap

Sen. Max Baucus, D-Mont.

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Rep. Dave Camp, R-Mich

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Two congressional leaders kick off tax reform tour in Twin Cities

  • Article by: Dee DePass
  • Star Tribune
  • July 8, 2013 - 9:31 PM

 

Bent on simplifying the U.S. tax code, two congressional leaders kicked off a nationwide “Tax Reform Tour” Monday with visits to 3M Co. in Maplewood and Baldinger Bakery on St. Paul’s East Side.

The visits by Sen. Max Baucus, D-Mont., and Rep. Dave Camp, R-Mich., are the first in a series designed to uncover what companies might want in a revamped tax code. Baucus, the chairman of the Senate Finance Committee, said his main goal is to simplify the code. Meanwhile, Camp, chairman of the House Ways and Means Committee, wants to update tax laws that have not been revamped since 1986. “It’s such a complex piece of code that it’s nearly impossible for average citizens and companies to do their own taxes,” he said.

Monday’s tour proved a hot topic among businesses lobbying for lower tax rates, simpler international trade rules and other measures that spur U.S. jobs. At 3M’s Innovation Center, the congressmen examined highly reflective and heat-resistant optical films before meeting with 70 3M employees. Workers said the company often faces high corporate taxes because more than a third of its sales come from the United States.

At Baldinger, a family-owned commercial bakery best known for making hamburger buns for McDonald’s, owner Steve Baldinger told Baucus and Camp that he wants to focus on growing the business instead of worrying about tax rates. “If I could [lean] on you to do one thing, it would be to simplify the code,” said Baldinger, who is the fourth generation to run the company that started in 1888.

The bakery received $4 million in 2011 federal tax credits that helped it expand and stay in St. Paul. Baldinger now boasts 90 workers and an army of shiny truck-sized ovens that pump out thousands of buns each hour.

Baucus said it is important to hear from such companies because they are not in “the Washington bubble” and directly manufacture, research and employ people. Future tours will include visits to educational institutions and nonprofits so Congress can learn how the tax code affects them, he said.

Camp and Baucus have worked with the House and Senate for three years to overhaul the tax code. They launched the taxreform.gov website this year and received 10,000 suggestions for change. Baucus wants to start “with a clean slate,” he said. “Get rid of all the deductions, exclusions and fancy codes” that force average citizens and businesses to hire accountants just to understand tax laws.

Baucus admitted sitting at his kitchen table years ago and realizing that he needed a tax professional. It didn’t matter that he had a college degree and a law degree, he said. It would have taken days to read the entire 73,000-page tax code. Its so complicated that it forces the tiniest small business to spend 13 hours on taxes.

It’s “out of control,” Camp said. “The complexity increases the cost of compliance for both citizens and corporations.”

During Monday’s meeting, 3M senior tax counsel Lauri Ink urged the congressmen to get the corporate tax rate closer to the 25 percent found in Canada. (3M’s tax rate is expected to hit 30 percent this year).

Camp lamented that the United States has the highest international taxes because they are based on tax codes written in the 1960s. “Other nations have dramatically reformed their tax codes and we haven’t. We’ve been static.”

When asked when a new tax proposal might be ready to present to Congress, Baucus said he’s hoping that it would be this year.

 

Dee DePass • 612-673-7725

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