No U.S. tax reform plan in the works-Obama aide
* Modest revenue increase needed-Mazur
* Senator Wyden: Where is the urgency?
By Kim Dixon
WASHINGTON, May 8 (Reuters) - President Barack Obama's nominee to be the top tax official at the U.S. Treasury Department said on Tuesday that the administration is not actively working on a plan to revamp the tax code, frustrating some of Obama's fellow Democrats.
"We'd be negligent if we weren't doing foundational work ... But at this point there is no plan that is being developed," Mark Mazur, Obama's nominee for Treasury's top tax job, said at a Senate panel hearing on his confirmation.
Democrats and Republicans, including Obama, call revamping the complicated tax code a top priority, but acknowledge this will not happen until after the Nov. 6 elections.
Mazur, currently deputy assistant secretary for tax analysis, will lead Treasury tax policy if he is confirmed by the Democratic-led Senate. His nomination is being weighed by members of the Senate Finance Committee, which oversees tax policy.
The tax code has not been overhauled comprehensively since 1986 under President Ronald Reagan. In the ensuing years, the code has become weighed down with copious exemptions, deductions, credits and other provisions for special interests.
Ranging from middle-class sacred cows such as the deductions for mortgage interest and charitable giving to business tax breaks for private equity executives and corporate offshore profits, the U.S. tax code is riddled with loopholes.
With the federal deficit near $1.2 trillion a year, the tax code falls far short of generating adequate revenue for the government, but politicians are bitterly divided on the mix of spending cuts and tax increases needed to fix that problem.
Committee Chairman Max Baucus, a Democrat, asked Mazur whether Treasury is working on a plan to revamp the code, as it did under Reagan.
"We are in the early stages of developing public support," Mazur replied.
Democratic Senator Ron Wyden seemed irked. "Where is the sense of urgency?" he said, suggesting that Congress has already moved beyond "early stages" and citing many congressional hearings and a slew of reports from the past year or so.
But Mazur said tax reform was going to be a tougher slog than it was in 1986, when reform was "revenue neutral," neither raising nor lowering the overall federal tax take.
"We are going to need to modestly increase revenue, unlike in 1986," Mazur said.
Most Republicans oppose any increase in taxes and many want to slash government social spending. Democrats tend to favor a mix of spending reductions and modest tax increases on the wealthy.
"Unfortunately, unlike in 1986, the administration does not seem interested in leading the way and helping to forge a serious proposal for fundamental tax reform," said Senator Orrin Hatch, top Republican on the committee, at the hearing.
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