Max Baucus, the chairman of the U.S. Senate Finance Committee, donned his Dracula costume last month, and proposed retroactive taxation on the business community. Unlike Bela Lugosi in the original 1931 film, where Count Dracula says, “I have come to suck your blood,” Max has pulled on his rubber gloves and decided to probe the business community’s colon to see whether it can withstand retroactive taxation.

In the senator’s defense, his goal is to overhaul America’s outdated tax code, which acts like a brake on the economy. He proposes “… to simplify tax rules, reduce the corporate income tax, lessen the burden on small business, and jumpstart job growth.” To accomplish this, Max also wants to raise more revenue to reduce the debt. One attaboy for Montana’s senior senator.

All doctors know, however, that the first rule of medicine is to do no harm to the patient. So what is Max’s prescription to accomplish reform?

While most of us were dreaming of the Thanksgiving turkey, Max and his committee cohorts sent up a trial balloon in the form of drafts of committee-staff discussions. The scope of the drafts expand the definition of taxable income, euphemistically called “base-broadening.”

The first proposal is called “deemed repatriation.” In Washington-speak, this means changing our present worldwide income-tax system, which requires individuals and businesses to pay U.S. tax on income earned abroad as well as on U.S. income. Currently, U.S. taxpayers may claim a foreign-tax credit for income taxes paid to other countries and may defer U.S. tax until they “realize” the income by bringing it back to the states. With anywhere between $1 trillion and $2 trillion in earnings sitting in overseas coffers, Dr. Max wants to change the rules by subjecting these funds to a one-time, 20-percent tax. By simply waving his colonoscope, voila, the funds are repatriated.

Next, our intrepid reformer turned doctor, wants to retroactively repeal the current depreciation schedule, including existing assets. On Jan. 1, 2015, Dr. Max proposes to change existing and future depreciation schedules to extend the period over which depreciation may be deducted against income. Yes, you read this correctly: the new system would apply to existing depreciable assets.

Finally, Max and his minions want to repeal LIFO. Last-in-first-out has been an accepted tool for inventory accounting since the Revenue Act of 1938. Under current law, a business can’t deduct inventory costs until it sells the items. LIFO thus serves as a hedge against inflation, by more accurately mirroring the true cost of the item. The result, typically, is lower reportable income. Enter Dr. Max, who would not only disallow LIFO, but also do so retroactively. Those enterprises utilizing LIFO will be required to convert their inventory recordkeeping to FIFO, first-in-first-out, and pay a tax on the accumulated difference.

Being the generous person that he is, Sen. Baucus would allow businesses eight years to pay for any back taxes on depreciation and LIFO revisions.

So who should enjoy this business colonoscopy? Clearly, the tax collector. Since business has so little time to adjust to these prospective changes, the U.S. Treasury projects a large, monetary windfall.

And who will bear the pain? Businesses. In a period of great economic and political uncertainty, the tax-grab will make companies even more reluctant to invest, because there is no clarity in the after-tax returns of future investments. Furthermore, the retroactive taxes are plainly unfair. Third, large tax increases may strain companies financially, because they have already committed the anticipated funds to other purposes.

At least Count Dracula was confined to celluloid. Dr. Max, a.k.a. your friendly gastroenterologist intent upon confiscating wealth obtained legally, is not contained. I hope the good doctor at least offers the business community a strong sedative before he begins his procedure.

Contact Poltenson at npoltenson@cnybj.com

Recently, the Tax Relief Commission led by former New York Gov. George Pataki and former Comptroller H. Carl McCall issued its recommendations to save New Yorkers $2 billion in taxes over the next three years. The commission recognized immediately that New York’s tax burden is too expensive for homeowners and is crippling the state’s economy, weakening its ability to compete globally as well as with other states.

Last year, we passed a 2 percent property tax cap, which has helped to slow the growth of property taxes. I am pleased to see that most municipalities have tried to adhere to the property tax cap. But what if New York flat out freezes property taxes? That’s exactly what the tax commission is recommending.

The tax commission is proposing to freeze property taxes through a rebate program. During the first year of the program, homeowners who live in municipalities where property tax growth is kept within the 2 percent cap will receive a rebate equal to the increase on their property tax bill.

The following year, municipalities and schools will have to prove that they have taken meaningful steps to provide savings and permanent reductions in spending through shared services or consolidation. When they do, homeowners will be given another rebate.

It sounds a bit radical, but something must be done. I know many of our municipalities and schools are striving to save public tax dollars, but the addition of rebates being tied to common-sense budgeting will keep public officials more accountable to the property taxpayers they serve.

It’s a bold proposal, but I think homeowners who are struggling to pay their tax bills will appreciate this effort. There are many other proposals, but this one will have an immediate and positive effect on families and communities.

The Tax Relief Commission’s plan to freeze property taxes is a good start. But if we are going to offer bold solutions to provide tax relief for middle-class families, why stop there. We could also double the STAR property tax rebate, which would on average save families and qualified seniors $1,400 a year. Thinking big and bold, we should really offer up a 2 percent income-tax rate cut to middle-class taxpayers, which would save families an average of $1,033. When it comes to providing New York’s families with tax relief, we will need new and fresh ideas like these.

I will be encouraging my legislative colleagues to adopt these proposals, and will continue to push for additional measures to reduce the tax burden on hardworking families and job creators. If you have ideas or suggestions about reducing taxes in New York, please feel free to contact me.

Marc W. Butler (R,C,I–Newport) is a New York State Assemblyman for the 118th District, which encompasses parts of Oneida, Herkimer, and St. Lawrence counties, as well as all of Hamilton and Fulton counties. Contact him at butlerm@assembly.state.ny.us