Meridian Star

Columns

April 1, 2014

Crowers Cower from Tax Reform Plan

MERIDIAN — “What is needed is a thorough restructuring of the tax laws – one that is broad and yet achievable,” crowed House Budget Chairman Paul Ryan in his “Roadmap for America’s Future” released in 2010.

     “I believe we must make the tax code simpler and fairer,” crowed Republican presidential candidate Mitt Romney in 2012. “We must reduce tax rates for job creators to promote economic growth.”

    “Comprehensive tax reform is long overdue,” Speaker of the House John Boehner crowed in 2013. “At four million words and growing, our federal tax code is too complex and too inefficient.”

     Republicans have crowed about tax reform for years. Indeed, since they took over the House in 2011, House Republicans have promised comprehensive tax reform in their annual budget proposals.

     Rep. Dave Camp of Michigan, chairman of the House Ways and Means Committee, was directed by Speaker Boehner to develop a tax reform plan.

     Ta da!

     Rep. Camp released the plan last month, one that is very fair to middle income earners, reduces rates on high earners, and eliminates much of the complex tax code.

     Camp said his pro-growth proposal would create up to 1.8 million new jobs. It would cut the top tax rate to 25%. It would increase the standard deduction to $22,000 and, thereby, simplify individual tax returns for up to 95% of filers by eliminating the need to itemize deductions (also eliminating the need for mortgage interest and state and local tax deductions).

     But there was no crowing by Republican leaders. Rather, they dodged questions about when, or if, the Camp plan would be considered.

     “Dave Camp should be congratulated for having the courage to put something like this on the table to get this conversation going,” said Ryan.

     “You're getting a little bit ahead of yourself,” Speaker Boehner said when asked if House Republicans would stand behind the Camp plan.

     “I think we will not be able to finish the job, regretfully,” said Senate Minority Leaders Mitch McConnell.”

     What caused the crowers to suddenly cower? Turns out there are many powerful lobbyists who do not favor a simpler, fairer tax code.   

     Among the contentious issues are: elimination of the "carried interest" loophole that private-equity managers use to shield earnings; reducing from $1 million to $500,000 the amount of a home mortgage on which interest is deductible; elimination of a loophole that entrepreneurs, consultants, lawyers, doctors and other professionals use to avoid paying Social Security and Medicare payroll taxes by taking their earnings as business income instead of wages; and elimination of deductions for state and local taxes.

     Check out Camp’s plan yourself at the web site: tax.house.gov.

     Then, next time your Congressman crows about the need for tax reform, ask him to talk turkey about Camp’s plan.

 

Crawford (crawfolk@gmail.com) is a syndicated columnist from Meridian.

 

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