Sen. Max Baucus, D-Mont., ranking minority member of the Senate Finance Committee, has threatened to hold up President Bush's nominee for the Treasury's top tax position, unless the department agrees to provide a comprehensive plan to close the tax gap by the end of September.Baucus said that neither assistant Treasury secretary nominee Eric Solomon nor new Treasury Secretary Henry Paulson had agreed to meet a Sept. 30 deadline for a plan to close the gap - the difference between taxes collected and taxes legally owed. Various estimates have put the hard-to-quantify number at upwards of $300 billion annually.
Solomon is currently serving as the deputy assistant secretary for tax policy, and is conducting a number of the Treasury tax duties in his current post. President Bush had nominated Solomon in May. Previously, Solomon was a partner at Ernst & Young, where he was a member of the Mergers & Acquisitions Group of the National Tax Department in Washington. Before his stint at the Big Four firm, he worked at the Internal Revenue Service for five years, serving as corporate assistant chief counsel and overseeing the agency's legal division, with responsibility for all corporate tax issues.
Solomon needs approval from both the Senate Finance Committee and the full Senate for confirmation as an assistant secretary. His hearing was bumped back by the late June hearings for Paulson's confirmation. The committee expected to have Solomon's nomination cleared by the Senate before the traditional August break.
However, the last two nominees for the position have run headlong into a bureaucratic logjam. Since the 2004 departure of Pamela Olson from the job, Bush's initial nominee, Treasury official Greg Jenner, was never confirmed, and left the government that same December. Bush's second nominee, Philip Morrison, withdrew in October 2005 after seeing a protracted confirmation process that dragged on for nearly six months.
Baucus called Solomon both a tax expert and a good public servant, but said that the Treasury Department hasn't shown appropriate concern and action on the tax gap issue.
Meanwhile, in June, the Senate Finance Committee pushed hard for answers from Solomon on when the Treasury Department would supply recommendations on an overhaul of the tax system, and how best to meaningfully improve the nation's tax compliance.
Committee chair Charles Grassley, R-Iowa, said that he expected a firm answer on when the Treasury would forward its recommendations on tax reform to the president.
Since the President's Advisory Panel on Federal Tax Reform issued its final report in November 2005, the panel's reform recommendations have been relegated to the political scrapheap while waiting for Treasury review.
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