The latest sweeping attempt at tax reform wasn’t just dead upon its arrival, which is scheduled for Wednesday afternoon. In the words of former Bush administration official Tony Fratto, it was dead before arrival.
Here’s why no one in Congress wants anything to do with Camp’s bill.
Michigan Rep. Dave Camp, the Republican chair of the House Ways and Means Committee, is set to introduce his proposal for an overhaul of the nation’s tax code Wednesday afternoon. However, in the days and weeks leading up to the unveiling, there has been somewhat unusual broad bipartisan opposition to the legislation.
Republicans, in particular, are fretting that the bill will hand Democrats plenty of gifts to use as Republican attacks in an election year.
“Are there going to be areas here where Republicans are going to be vulnerable?” a Democratic Hill aide told Business Insider. “Yes, and that’s probably why you’re seeing so many Republicans run away from this already before it’s even been released.”
Publicly, many Republicans have been distancing themselves from the legislation, because they see it as a potential problem for the party’s efforts to slow walk its legislative agenda until the midterm elections. Any hint of controversy could threaten the GOP’s goal to win more of a House majority and, more importantly, to take back control of the Senate. It’s why, recently, Republicans have ceded the fight on fiscal issues like raising the debt ceiling.
On Wednesday, even House Speaker John Boehner wouldn’t publicly offer his support for the legislation. In a press conference, he said it was good to start a “conversation” about tax reform. But, when asked if the party was prepared to back Camp’s plan, he told a reporter, “You’re getting a little bit ahead of yourself.”
Camp is likely making this play because it’s the last year of his chairmanship on the Ways and Means Committee — and because one of the dreams of every Ways and Means chair is to lead a comprehensive overhaul of the nation’s too-complicated tax system.
According to reports in The Washington Post and elsewhere, Camp’s proposal calls for the number of tax brackets to be slashed from seven to just two — 25 per cent and 10 per cent. It also would impose a 10 per cent surtax on certain types of earned income above $US450,000 a year, something that is likely to hit constituencies that normally align with Republicans.
The simplification of tax brackets would also likely eliminate some of the more popular tax breaks in the current code, such as the deduction for home mortgage interest. According to Politico, Camp’s plan also includes an idea that originated in the White House — an unspecified tax that would be imposed on big banks, in part to offset the bailout some of them received during the financial crisis.
Republican Senate Minority Leader Mitch McConnell already threw cold water on the idea Camp’s plan has any chance of becoming law.
“I think we will not be able to finish the job, regretfully,” McConnell told reporters Tuesday. “I don’t see how we can.”
Although the proposal has some elements of interest to Democrats, it’s also unlikely that they would be willing to accept a reduction of the top tax bracket to 25 per cent after pushing it to 39.6 per cent in the fiscal-cliff deal. Meanwhile, though Camp had struck an alliance with Democratic former Senate Finance Committee Chairman Max Baucus — the new U.S. Ambassador to China — it’s unclear how the current chairman, Democratic Oregon Senator Ron Wyden will approach the issue.
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