Tax Code Overhaul Must Be Made a U.S Priority

Tax Code Overhaul Must Be Made a U.S Priority

by | May 17, 2012 | News

Tax Code Overhaul Must Be Made a U.S Priority, Camp Says

By Richard Rubin – May 17, 2012

The U.S. Congress and President Barack Obama should endorse a fast-track approach leading to a rewrite of the tax code in 2013, Representative Dave Camp, the top House tax writer, said today.

“Doing so would send a clear, strong message to the markets, to employers and families that Washington is serious about reforming our tax code and putting us on a path to sustained economic growth,” Camp said in a speech in Washington, according to prepared remarks distributed by his office.

Camp, 58, a Michigan Republican, is chairman of the House Ways and Means Committee. He spoke today at a conference sponsored by Baker & Hostetler LLP, the lobbying firm Federal Policy Group and the Yale Club of Washington.

The fate of a tax code overhaul is linked to other fiscal policy issues. They include automatic spending cuts starting in January and expiration of tax cuts that comprise a so-called fiscal cliff late this year that could reduce the gross domestic product by about 3 percent if Congress does nothing.

Camp and House Speaker John Boehner, an Ohio Republican, want to couple the short-term extension of expiring tax cuts with what they both called an “expedited process” to ensure a tax code rewrite in 2013. They haven’t decided on details of the process or estimated what the consequences of inaction would be.

Indefensible Status Quo

“There is a recognition that the status quo is indefensible,” Representative Peter Roskam, an Illinois Republican on the Ways and Means Committee, said in an interview yesterday. “There’s a recognition that there’s an opportunity to do something, and I think that the public would become very dissatisfied if in the next Congress it’s not dealt with.”

The House Republican budget adopted earlier this year calls for dropping the top individual and corporate tax rates to 25 percent from 35 percent, eliminating the alternative minimum tax and reducing the number of individual tax brackets to two from six.

The proposal would require Congress to curtail or eliminate many tax breaks, and Democrats have criticized Republicans for not being specific about the most politically difficult portions of their plan.

Camp has been holding hearings and planning sessions with House Republicans.

’Dusty Springfield Song’

“Clearly, progress has been made,” he said. “This isn’t just some Dusty Springfield song, and we aren’t just sitting around ‘wishing and hoping and thinking and praying’ that tax reform will get done.”

The administration hasn’t proposed an overhaul of the entire tax code. It won’t do so because negotiations last year with Republicans proved “impossible,” Treasury Secretary Timothy F. Geithner told Camp at a Feb. 15 hearing.

“Your side walked away from the table three separate times,” Geithner said. “You guys were not ready.”

Camp urged business groups and others with a stake in the outcome to get involved in the process of making those tradeoffs.

Tax reform cannot be achieved if everyone retreats to their four corners,” he said. That is “why we are now struggling under the weight of a tax code that bears significant responsibility for the sluggish economic recovery.”

No Decisions

He also said no decisions have been made on reviving miscellaneous tax breaks that expired at the end of 2011. These so-called extenders include the research and development tax credit and accelerated depreciation for motorsports tracks.

“If extenders are beneficial and are helping the economy, then they should be seriously considered,” Camp said. “On the other hand, if an extender has outlived its value, and if it is not producing the economic benefits it once was, then we need to determine whether there is merit in continuing that provision.”

To contact the reporter on this story: Richard Rubin in Washington at +1-202-654-7307 or [email protected]

To contact the editor responsible for this story: Jodi Schneider at +1-202-654-7362 or [email protected]