Tax code overhaul seems less likely to U.S. tax executives: survey

Wed May 1, 2013 6:42pm EDT

Senate Finance Committee Chairman Max Baucus speaks during a hearing on oil and gas tax incentives and rising energy prices, on Capitol Hill in Washington May 12, 2011. On left is Senator Jay Rockefeller. REUTERS/Kevin Lamarque

Senate Finance Committee Chairman Max Baucus speaks during a hearing on oil and gas tax incentives and rising energy prices, on Capitol Hill in Washington May 12, 2011. On left is Senator Jay Rockefeller.

Credit: Reuters/Kevin Lamarque

(Reuters) - Tax executives are growing less optimistic about the possibility of an overhaul of the U.S. tax code, according to a survey released on Wednesday by accounting firm Ernst & Young.

Despite determined talk lately in Washington, just 35 percent of 420 executives surveyed said tax reform was still gaining traction, down from 41 percent last year, E&Y said.

Some executives are refocusing their attention on other topics. Only 18 percent said they were actively engaged with tax reform, down from 25 percent last year, the survey found.

"Overall, we are seeing that tax directors are less confident that major tax legislation will occur either domestically or internationally in the immediate future," said Kate Barton, E&Y Americas vice chair of tax services.

Max Baucus, the Senate's top tax writer, pledged last month to spend much of the time remaining before his 2014 retirement stepping up his bid to revamp the tax code. Baucus, a Democrat from Montana, chairs the Senate Finance Committee.

Dave Camp, the House of Representatives' top tax writer, has been sounding as committed as Baucus. Camp has vowed to produce tax reform legislation this year. The Michigan Republican chairs the House Ways & Means Committee.

A code overhaul has not occurred since 1986, when Republican President Ronald Reagan and a divided Congress did it.

On the chances of reform anytime soon, skeptics abound on Capitol Hill, where major decision-making power is largely held by party leaders and deep divisions over fiscal policy persist.

"It seems like we are forever talking about the possibility of tax reform," Barton said in a statement. "This time it might actually happen, according to the chairmen of the House and Senate tax writing committees. They are working hand-in-glove."

(Reporting by Nanette Byrnes; Editing by Kevin Drawbaugh and Andre Grenon)

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