The issuance of three tax reform discussion drafts by Senator Max Baucus (D-Mont.) within the last two weeks has left many U.S. businesses wondering, “Where’s the Rate?”. While Sen. Baucus has said that he wants to reduce the corporate tax rate to less than 30 percent from the current 35 percent, the discussion drafts, which include proposals for international tax reform and the reform of cost recovery and tax accounting rules, are void of a proposed corporate tax rate. The absence of a specified rate has made assessing the potential impact of the proposals difficult, if not impossible. Many businesses, particularly those with international or capital-intensive operations, are worried about the true cost of reform.
House Ways and Means Chairman Dave Camp (R-Mich.) has proposed lowering the rate to 25%, and the Obama Administration has proposed lowering the rate to 28% for most businesses and 25% for domestic manufacturers. But neither has proposed specifically what other changes are necessary in order to meet those rates while making corporate tax reform revenue neutral.