Washington, DC- As part of the blank-slate process established by the Finance Committee leadership, U.S. Senator Bob Casey (D-PA), a member of the Senate Finance Committee, has submitted his recommendation for a fairer, more efficient tax code. His priorities include promoting economic growth in Pennsylvania and beyond, financial security for children and families, and simplifying the code.
Senator Casey’s letter outlining his priorities to Chairman Baucus and Ranking Member Hatch can be found here and below:
The Honorable Max Baucus
The Honorable Orrin G. Hatch
Dear Chairman Baucus and Ranking Member Hatch:
I appreciate the invitation to submit my views on tax reform to the Finance Committee. The letter below reflects broad Pennsylvania priorities for reform. The exclusion of provisions should not necessarily be interpreted as a preference for striking them from the tax code. I look forward to an ongoing dialogue as the Committee drafts legislation.
The goal of tax reform should be creating a fairer, more efficient code that is easier to administer and leads to economic growth. As members of the Finance Committee, we have a unique opportunity to create an internationally competitive tax system for American businesses—domestic and global, large and small—and I look forward to working with both of you to achieve this goal. For the purposes of this letter, I would like to highlight a few particular priorities for Pennsylvania’s economy and residents.
First, I am interested in incentives that promote economic growth in Pennsylvania and beyond. As such, the strength of the manufacturing sector is critical. I urge you to protect incentives for domestic investment and production, including accelerated depreciation. In addition, we must continue to incentivize innovation, which benefits many key Pennsylvania industries, including the life sciences. Next, Pennsylvania is an energy state. The Commonwealth’s leadership in natural gas, propane, biofuels and alternative fuels, clean coal, hydropower, nuclear, wind, biomass, waste and other renewable energies can move us toward energy independence and create jobs. The tax code has long played a role in our nation’s energy policy and I will continue to support smart policies that leverage Pennsylvania’s vast resources to meet our energy challenges. Lastly, the vast majority of Pennsylvania businesses file through the individual code. Given this fact, it is imperative that we proceed with business tax reform and not exclusively corporate tax reform.
Fostering financial security for Pennsylvania residents is another top priority. The tax code provides an important policy tool to create financial stability, pull Pennsylvanians out of poverty, provide healthcare and encourage savings for education and retirement. Amid the push to simplify and reform the tax code, we must preserve incentives that families count on to improve their financial outlook. I am particularly concerned with the treatment of the Child Tax Credit (CTC) and the Earned Income Tax Credit (EITC) in any effort to reform the tax code. Therefore, I strongly urge you to improve and make permanent both credits.
Pennsylvanians understand we need to simplify our code and make it user friendly. Tax compliance costs businesses an average of $800 per employee every year—a number that almost doubles for very small firms. The growing complexity of our Nation’s tax code has created real, significant costs for our economy and for the federal government. We should look for opportunities to simplify the code to increase compliance, cut down on fraud and close the tax gap, which has been estimated to be as high as $385 billion.
Lastly, tax reform must be viewed in the broader context of long-term budget sustainability. I implore the Committee to lead in the effort to find a revenue-spending cut ratio that achieves a balanced solution to our long-term budgetary challenges. I recommend that we look to the framework adopted in the Senate-passed FY 2014 Budget Resolution as a starting point.
Thank you for your consideration.
Robert P. Casey, Jr.
United States Senator