Congressional Quarterly has a really good article on the state of tax reform discussions on the Hill, and the Super Committee in particular. Here’s a few of the key paragraphs:

Advocates of a corporate overhaul argue that a lower corporate tax rate would help spur economic growth by improving the competitive position of the United States, which now has the second-highest corporate tax rate in the world, much to the chagrin of lawmakers in both parties. Moreover, with the unemployment rate hovering above 9 percent, lawmakers are eager to have the deficit panel take steps to boost the sluggish economy, even as the panel tries to write a $1.2 trillion deficit-reduction package by its Nov. 23 deadline.

Still, it would be difficult to pay for a significant rate reduction solely by eliminating tax breaks for companies. And raising more revenue than the government collects under the current tax system, as Democrats have demanded, also presents challenges.

Economists note that eliminating certain corporate tax breaks - such as the research and development tax credit and domestic manufacturing deduction - to pay for a lower overall rate could end up harming some industries that benefit significantly from the tax incentives.

In addition, there is a lingering problem, well-known to lawmakers, that many “pass-through” companies do not pay the corporate tax at all. Instead, they have their profits distributed to individual owners or partners, who are then taxed as individuals. Lowering the 35 percent corporate tax rate and eliminating industry-specific tax breaks without also lowering the 35 percent top individual tax rate could hurt those companies.

Concerns about putting one company at a disadvantage compared with another are precisely what give some lawmakers pause about settling for anything less than a rewrite of the entire tax system. Given those concerns, and Democratic hopes for more revenue from wealthier Americans, it will be hard for some lawmakers to abandon hopes of a complete overhaul.

Nevertheless, members of the deficit panel are trying to find a creative solution that would be fair to all types of businesses without major changes to the individual portion of the tax code, according to a congressional aide familiar the panel’s discussions.

Such efforts, which have yet to yield definitive, or public, solutions, are reflected in the comments from Hensarling and Ryan, who notably avoided terms like “corporations” and “corporate tax reform” in favor of “business-entities” and “business tax reform.”

This story confirms what we’ve been telling our members since January — there continues to be a strong interest in pursuing corporate or business “only” tax reform.

This time, the idea is to use tax reform to leverage cuts to entitlement programs. Democrats on the Super Committee have made clear that without tax provisions “on the table” they won’t agree to significant changes to Social Security, Medicare, or Medicaid. But there’s concern that reforming the entire tax code is simply too much. So the more narrow corporate reform is seen as the key to unlocking meaningful deficit reduction.

The challenges to this plan remain the same ones we’ve articulated in the past.  How do you construct corporate or business only reform that is budget neutral, or even raises revenue, without hurting specific industries, like manufacturing, or harming pass-through businesses? The lack of any particular plan — either from the Administration or the tax writing Committees — suggests these obstacles have yet to be overcome.

For guidance, an impressive group of 40-plus business groups‘ including the National Federation of Independent Business, the National Association of Wholesale Distributors, the Associated General Contractors, the American Council of Engineering Companies, the Independent Community Bankers of America, the S Corporation Association, and the National Restaurant Association, wrote tax writers earlier this week articulating three key principles to successfully reforming the tax code. These principles might not match up with the goals of some Super Committee members, but if you want to make American employers more competitive, they are a good place to start.