The Senate Finance Committee pushed hard for answers from a tax policy nominee on when the Treasury Department will supply recommendations on an overhaul of the tax system, and how best to meaningfully improve the nation's tax compliance.
President Bush nominated Treasury deputy assistant secretary Eric Solomon to be the assistant secretary of the Treasury for tax policy in May. The position has been vacant for since the close of 2004.
Committee Chairman Sen. Charles Grassley, R-Iowa , stressed that he expected a firm answer on when the Treasury would forward its recommendations on tax reform to the president. Grassley's committee will hold its own hearings on an overhaul of the tax code later this month. Since the president's Advisory Panel on Federal Tax Reform issued its report in November 2005, the panel's recommendations -- which proposed a series of changes ostensibly aimed at making the tax system simpler and fairer by eliminating many deductions and reducing tax rates -- have been relegated to the political scrapheap waiting for Treasury review.
"The foremost challenge is our tax code itself," Solomon said. "Its numerous intricate provisions often distort economic decisions. The tax code contains many provisions that were enacted decades ago and have not been updated to reflect changes in our dynamic and increasingly global economy. Its complexity breeds perceptions of unfairness and creates opportunities for avoidance."
Solomon said he would need to fully brief new Treasury Secretary Henry Paulson on tax system proposals before he could say when Treasury's recommendations would be completed. Solomon also pledged to work to close the tax gap, as well as battle unfair tax shelters.
Solomon's hearing was bumped back by the late June hearings for Paulson, who took office this week. The committee expects to have Solomon's nomination cleared by the Senate before the August break. Solomon, who joined the Treasury in 1999, has been sharing responsibility for running the tax policy division since December 2004.
Previously on WebCPA:
Bills Introduced to Form New Tax Reform Commission (June 14, 2006)
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