The Baucus proposals come at a time when hopes for comprehensive U.S. tax code reform before 2015 have all but vanished, while concern rises about corporate tax avoidance elsewhere in the world, including among key U.S. allies.
Congress is still deeply divided over fiscal policy, including taxes, but President Barack Obama said on Tuesday that there was "not that much separation between what Democrats are talking about" and what some Republicans seek on taxes.
Speaking at a Wall Street Journal conference in Washington, the president said, "This should be bridgeable."
He cautioned, however, against any plan seeking to cut corporate taxes without also closing tax loopholes. "We would then blow another hole in the deficit that would have to be filled. And what I'm not willing to do is to have higher rates on the middle class in order to pay for that," he said.
'Just a first step'
The top U.S. corporate income tax rate is one of the highest in the world at 35 percent, though few multinationals pay it thanks to an abundance of loopholes available to them.
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An estimated $2 trillion in foreign profits is being held offshore by U.S. multinationals to avoid paying tax on it.
The Baucus proposals include the idea of a global minimum tax for U.S. corporations, with various distinctions between active and passive income, as well as income derived from goods and services sold into U.S. markets and into foreign markets.
Baucus said the proposals were not a final plan and were meant to spark discussion. "This is just a first step," he said.
He did not say when he might offer his plan as legislation. He said in April he will not seek re-election next year.
The U.S. tax code has not been thoroughly revamped since 1986. Since then, it has been weighed down by hundreds of tax breaks—such as the mortgage interest deduction and the research credit—now deeply embedded in the economy.
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This has made the politics of tax reform so difficult that successive presidents and Congresses have tried, but failed to tackle it. Analysts hold out little hope that the present dysfunctional Congress is capable of taking on such a task.
Robert Willens, a noted corporate tax and accounting analyst, said it was difficult to see tax-reform proposals "getting through such a fractious Congress."
"Congress has great difficulty agreeing on matters that are much less controversial and complex than comprehensive tax reform is likely to be," he said.
Baucus and camp still talking
Nonetheless Baucus, like Republican Representative Dave Camp, chairman of the tax-writing House of Representatives Ways and Means Committee, has continued to discuss possibilities.