In putting out a comprehensive rewrite of the nation’s sclerotic and inefficient tax code, House Ways and Means Committee Chairman Rep. Dave Camp (R-MI) displayed a degree of political courage virtually unheard of in recent years, if measured only by the number of constituencies he pissed off.
Because really, the number of political oxen gored by Camp’s proposal is practically endless.
Related: Camp’s tax Plan Hits Hedge Funds, Private Equity in the Gut
National Federation of Independent Business vice president Brad Close complained, “We are very concerned that this plan does not address the core issues that are important to all small businesses: simplifying the code, leveling the playing field for all businesses, and addressing both corporate and individual tax rates.”
The extraction industry wasn’t particularly happy with Camp, either. Jack Gerard, president and CEO of the American Petroleum Institute, said, “There are serious flaws in this discussion draft…that could hurt jobs, American energy production and our energy security.”
The Financial Services Roundtable, a trade group for the 100 largest financial firms in the country, railed against the proposal, saying it “would discourage retirement savings and reduce lending by hundreds of billions of dollars, hurt consumers and slow the economy.
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Tim Pawlenty, the former Minnesota governor who now heads the Roundtable, objected to a proposed tax on large financial institutions. “The last thing entrepreneurs, small businesses and consumers need in this still tenuous economy is a tax on lending. Increasing the cost of access to investment capital is a bad idea.”
With Camp getting so little love from the business community, you might think that watchdog groups focused on increasing the taxes businesses pay would be ecstatic. But you’d be wrong.
“This approach makes no sense as policy, and it’s not supported by the American people,” said Robert S. McIntyre, Director of Citizens for Tax Justice. McIntyre objected to the fact that the net tax revenue from businesses wouldn’t rise significantly under Camp’s proposal. “If this is what Congressman Camp calls a ‘competitive’ tax system, then the American people want no part of it,” he said.
Camp found it equally difficult to track down support on Capitol Hill. Sander Levin, the ranking Democrat on the Ways and Means Committee, has worked with Camp on tax reform issues for years. But on Wednesday, he hung his fellow Michigander out to dry with a statement on the proposal that was lukewarm at best. The bill, said Levin, “opens up a discussion that Democrats have wanted to engage in on a bipartisan basis.” He promised, “[W]e will review Chairman Camp’s proposal in detail as the Committee undertakes a thorough examination of his proposal.”
Related: Dave Camp, Tax Warrior, Makes Last Stand on Tax Reform
Republican leadership was, if possible, even less helpful. Senate Minority Leader Mitch McConnell on Tuesday essentially called the Camp bill dead on arrival in an interview Tuesday. And on Wednesday, asked about the details of the camp proposal, Speaker of the House of Representatives John Boehner waved off reporters saying “Blah, blah, blah.”
To be sure, Camp’s proposal did get endorsements from some quarters – particularly business sectors that rely on consumer spending. The National Retail Federation and the consumer-focused business group RATE (Reforming America’s Taxes Equitably) both came out in support.
Despite the political fallout, Camp has won praise from serious advocates of tax reform.
“I give him enormous credit for putting this out,” said Len Burman, head of the Tax Policy Center in Washington. While making it clear that he disagrees with a number of Camp’s proposals, Burman said that it is a “well specified” effort to move the debate forward.
Jonathan Traub, former Ways and Means staff director under Camp and managing principal of the Tax Policy Group at Deloitte Tax said that the proposal shows Camp’s long-time commitment to fixing the tax code. “He has informed the debate going forward and lightened the load of the people who follow him,” Traub said. “It’s likely that this forms the base from which future reformers start.”
Still, the bottom line on Camp’s tax reform proposal is that it will probably never be passed. Camp will be term-limited out of his chairmanship at the end of the year, and unless some future Ways and Means Committee chair is feeling generous, there will likely never be a Camp Tax Reform Act signed into law. But that makes what Camp released yesterday all the more impressive as an act of political courage. He didn't need to start this important debate, and won't really benefit from it. but he did it anyway.
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