Tax reform mulled after debt committee failure

WASHINGTON Mon Nov 28, 2011 5:05pm EST

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WASHINGTON (Reuters) - At least one Republican member of the congressional debt reduction panel is promising to forge ahead with tax reform after the panel failed to reach a deal to reduce the U.S. deficit.

Senator Rob Portman said on Monday he would soon introduce legislation to lower the corporate tax rate to 25 percent from 35 percent and giving a break on offshore profits.

Portman's bill, expected to be introduced next year, could add momentum to Republican Representative Dave Camp's bid to revamp the tax code.

Camp, the chairman of the tax-writing panel and former member of the debt reduction panel, has proposed slashing the top tax rates for individuals and corporations. He also proposed adopting a territorial system that would exempt 95 percent of companies' overseas profits from the U.S. corporate income tax.

"We are in the process of reaching out to other (lawmakers') offices," Portman told reporters one week after the 12-member congressional "super committee" abandoned efforts to reduce the country's growing public debt.

An overhaul of the tax code is seen as unlikely to happen in the 2012 election year, given the myriad of interest groups that would protest loudly and the hesitation of politicians running for office to take on sacred cows.

Portman admitted that the super committee was "not so super" after all, but said he remained optimistic that Congress could agree on some deficit reduction measures before the next year's presidential and congressional elections.

"We need to act now," said Portman, whose plan would also move the United States to a "territorial system."

(Reporting by Rachelle Younglai; Editing by Leslie Adler)