WASHINGTON — House Ways and Means Committee Chairman Dave Camp on Wednesday gave President Obama credit for his desire to overhaul the corporate tax code, but was nonetheless critical of his fiscal 2015 budget.
"While I commend the administration for proposing ideas to reform parts of the code and close loopholes, I am disappointed that the administration turns its back on small businesses," the Republican from Michigan said in a written statement prepared for a Ways and Means hearing on the budget. "Furthermore, increasing taxes to pay for new spending and a larger government, which this budget does, is not real tax reform, and it certainly isn't a plan that will create a stronger economy," he added.
During the hearing, Camp said that he finds fault with administration officials saying Obama's corporate tax-reform proposal is revenue-neutral in the long-term. As he reads the budget, there would be a $150 billion business tax increase in the first 10 years to pay for infrastructure investments and then it would be revenue neutral in the 11th year and later. "Don't the first 10 years count as well?" Camp asked Treasury Secretary Jack Lew.
Lew said that any tax-code overhaul would produce revenue at the beginning from the transition to the new code that won't be there in the long-run.
Echoing similar comments from his testimony before the Senate Finance Committee Wednesday, Lew told House members that the transition revenue from corporate tax reform could be used to reduce the deficit or for one-time spending. The administration has chosen to do the latter and use the money for infrastructure investment.
Camp also asked Lew if there were any opportunities to reform and simply the tax code, such as in the area of saving to pay for college educations, that could be accomplished without resolving the issue of whether comprehensive tax reform should be revenue-raising or revenue-neutral.
"There I think is always room for conversations about what we can do to make the tax code more efficient, more effective and easier for people to use," Lew replied. "I do think that as we get to the conversation of comprehensive tax reform it's inherently tied to the fundamental question of whether revenue is part of a long-term fiscal plan."
Rep. Charlie Rangel, D-N.Y., asked Lew if he's received any indication, other than the submission of Camp's tax reform draft legislation, that congressional Republicans will actually work with the administration toward any kind tax reform.
"I'm a big believer in possibility. I think if people keep talking, anything's possible," Lew said. He noted that he regularly has conversations with Camp.
Lew said the Obama administration feels that using the transition revenues from corporate tax reform for infrastructure investment would be good for the economy.
"When I talk to CEOs, one of the things that they raise with me, even before tax issues, is the need for infrastructure," he said.
Like Obama's budget, the tax reform draft Camp released would use revenue from tax reform to fund the Highway Trust Fund. Rep. Earl Blumenauer, D-Ore., asked Lew if the Obama administration would be open to supporting his bill to raise the federal gas tax to finance infrastructure, should the proposals by the administration and Camp fail to pass. Lew said that the budget includes the method that the administration feels is the best way to maintain the country's infrastructure, but that the administration is willing to work with Congress in a bipartisan manner on infrastructure funding.
Camp said he is working with Blumenauer to try to hold a hearing about infrastructure financing in the near future.
