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Taxation

Camp Pushes for Tax Reform Bill This Year

FEB 26, 2013 4:31pm ET
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The House Ways and Means Committee chairman said Tuesday he wants to introduce a comprehensive tax reform bill that will be approved by the committee this year, and that he’s not endorsing the 28% cap that President Obama has proposed for tax exemption and other tax expenditures.

Tax reform is Rep. Dave Camp’s number one priority as a way to make the tax code simpler and fairer, he told reporters.

While he didn’t specify when a tax reform bill would be introduced, the Republican from Michigan said the timing doesn’t have to rely on some of the more pressing upcoming legislation such as sequestration, the debt ceiling and the continuing resolution.

“I’m not interested in a one-off,” Camp said. “A one-off doesn’t do anything to address economic growth and the ability of the economy to create jobs. I’m interested in a comprehensive effort.”

Obama has proposed the 28% cap as a method to raise revenue on several occasions over the past few years including in the recent fiscal cliff negotiations. Camp and the committee’s ranking minority member Rep. Sandy Levin, D-Mich., announced earlier this month that they had formed 11 separate working groups to review current law, and identify, research and compile feedback on various tax reform topics. Camp told reporters Tuesday that some of the groups have already begun meeting behind closed doors.

Municipal bonds could fall under several categories and is not limited to one working group, a spokesman for Camp said.

Meanwhile, Boehner announced Tuesday that he has reserved H.R.1 for the Ways and Means committee’s tax reform legislation. Typically H.R. 1 is a bill that the party who controls the House designates for signature legislation. 

 “Reforming our tax code to get our economy going again and create jobs is a top priority for House Republicans,” said Michael Steel, Boehner’s spokesperson.

“That sends a very strong signal that this is going to be a priority for the committee, not just for me but for this conference,” Camp said, insisting that he is committed to rewriting the tax code in a revenue neutral fashion and will push to achieve a 25% individual tax rate.

Camp said he has been working with Senate Finance Committee Chairman Sen. Max Baucus, D-Mont., to ensure a comprehensive overhaul of the tax code happens this year.

“We have to build this legislation,” Camp said. “This is not a bill that we are ready to roll out. The last two years have been focused on building the record and with more than 20 hearings in the committee we will continue that this year.”

Camp also said he is looking forward to working with Treasury Secretary nominee Jacob Lew, once he is confirmed for that post. Lew’s nomination was approved by the Senate Finance Committee earlier Tuesday and now goes to the full Senate for final approval.

“There is a lot of technical support that the Treasury can offer that can be very helpful,” Camp said. “There is great potential to work together because Treasury has great expertise in this area. They could be very helpful if they chose to be.” 

Camp said he isn’t opposed to the Treasury publishing its own tax reform proposal in a similar way that occurred in 1986, the last time the tax code was overhauled. He said he had regular meetings with former Treasury Secretary Timothy Geithner last year but the tax reform discussions were put on a hiatus due to the presidential election and Geithner’s departure from the administration.

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A recent phenomenon is the emergence of bonds with shorter call protection as funding alternatives for municipalities. However, the shorter call protection also dampens the potential upside for investors, which in turn reduces the price they are willing to pay.

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