Sen. Ron Wyden, the incoming chairman of the Senate Finance Committee, said Friday his first priority in the job will be overhauling the nation’s tax system, which he called a “dysfunctional, rotten mess.”
In a telephone interview with The Associated Press, Wyden said he was inspired by the bipartisan income tax changes of 1986, when former Oregon Republican Sen. Bob Packwood was Senate Finance chairman and Ronald Reagan was president.
“The last time there was a big tax reform effort like this it created 6 million new jobs,” Wyden said. “I can’t say every one was due to tax reform, but it sure helped.”
Wyden is currently chairman of the Energy and Natural Resources Committee. He is expected to be named Finance Committee chairman next week to replace Sen. Max Baucus, D-Mont., whom the Senate on Thursday confirmed as the new ambassador to China.
“I intend to spend time listening to my colleagues from both political parties, particularly around creating jobs for middle class folks, strengthening Medicare guarantees while holding down the costs, and fixing this dysfunctional rotten mess of a tax system,” he said.
Wyden said he plans to start the overhaul by pushing a bill filed by Senate Majority Leader Harry Reid, D-Nev., to extend some 50 tax breaks that expired in December for such things as research and development, renewable energy and mortgage debt and use the extensions as a bridge to comprehensive changes.
Wyden would also like to see the standard deduction tripled to $30,000, so for “a middle-class person making $50,000 or $60,000, $30,000 would be off limits” for taxation.
Wyden said he’s already started working on revamping the income tax code with Sen. Dan Coates, R-Ind.
“If you really want to get a sense of the real world economic challenge, it’s time to focus on the needs of the middle class and deal with what I call the Neiman Marcus-Dollar Tree economy,” Wyden said.
High-end retailers and bargain stores, like Dollar Tree, are driving retails sales, Wyden explained, while retailers that cater to the middle class are squeezed.
Wyden said also said that Medicare is dealing with different challenges today than when it was created in 1965.
“Today the program is primarily about chronic disease: diabetes, cancer, stroke, heart disease,” he said. “The care for these serious health conditions is so fragmented and poorly coordinated.”
Wyden says he feels confident that Medicare can be changed to protect guaranteed benefits and hold down the costs.