Republican Dave Camp has a plan on taxes
WASHINGTON: Before he retired, Republican Dave Camp, Republican, put years of work into his plan to overhaul the country’s taxes - attaining, according to Congress’s independent referees, that elusive and delicate balance that law makers aiming at tax reform have not achieved since 1986.
Camp’s plan would have made the tax code simpler and more transparent, without increasing the burden on the rich or the poor.
Camp, who retired two years ago, was respected as one of Congress’s foremost tax experts. As President Donald Trump and GOP law makers prepare to reform the system, H.R. 1 - Camp’s plan - might seem like a natural point of departure.
Yet his work might already be obsolete, because of a change in Congress’s rules imposed by Republicans. Today reformers might choose a different strategy, Camp said in a recent interview with The Washington Post.
Specifically, the non-partisan referees at the Congressional Budget Office and Joint Committee on Taxation are now required to evaluate how legislation would affect not only federal finances, but also the broader national economy. Under the new “dynamic” rules, as they’re known - as opposed to the old-fashioned “static” assessments - some ideas for the tax code might have a better chance of passage now than they did before.
Many economists, however, have said that depreciation encouraging companies to invest in new capital promotes hiring and the economy as a whole. And the “blueprint” for tax reform that Republicans put forward last year would make the break much more generous, an approach known as “full expensing.” “It’s in a postdynamicscore environment that they’re addressing this,” Camp said. “I think the attempt at full expensing is to really, sort of, push the growth.” Camp, now a senior policy adviser at PricewaterhouseCoopers, also talked about the Republican proposal for a border adjustment, a controversial plan that some worry could increase the prices consumers pay for imported goods. Despite the Republican failure to advance a bill to undo the Affordable Care Act, Camp said he was “cautiously optimistic” that Congress could take on the even more complicated task of reforming the tax code.
A transcript of the interview is below, edited for length. Q: The first question with tax reform is, I think, can Republicans do it? And the second question is maybe the more interesting one: If they can do it, what can they do exactly? A: Well, I do think that the possibility for tax reform looks good, but having said that, it’s a very complicated procedure both substantively and politically.
A lot of work has been done over the last several years on tax reform in the House and the Senate, by members of both parties. And I think there is a common sense that our tax code is broken, and that we’re out of step with the rest of the world on many of our tax policies, and that tax reform could be one way to bring more prosperity to individuals and families.
Q: I imagine that fewer Democrats would support a proposal to lower rates if revenue overall declined significantly, so what’s your view on revenue neutrality at this point? A: Revenue neutrality is one of the larger decisions that need to be made. Is this going to be an approach that’s going to be revenue neutral, or is this going to be an approach that’s revenue neutral based on dynamic scoring? Q: Do you feel that there is a possibility of bipartisanship in the current political environment? And if so, what do Republicans need to do to get Democrats on board with reform? A: So I think that some of this has been going on behind the scenes as well, certainly simply beginning by having conversations with members of the other party - those in the leadership positions, and those in the Ways and Means Committee - about what their key issues might be. And beginning those dialogues about what their priorities are. Q: You seem pretty optimistic. A: Eh, I’m cautiously optimistic. I think this is our best opportunity for tax reform in a very long time, but again, it is a very challenging process, and it’s very heavy lifting. I think it’s worth investing the time and effort to try to see if something can be successful. Q: And what about your own plan, the one that you put together while you were in Congress? Do you imagine that if Republicans were to go back to that plan today, that they could get the votes to move it through? A: Let me backtrack. I don’t believe there’s only one way to do tax reform. I think there’s a number of alternatives and decision points throughout a process like this, and it doesn’t have to be all like H.R. 1 or all like other proposals that have been discussed in the past.
Obviously, the kinds of assumptions I made in putting together H.R. 1 aren’t necessarily the same assumptions you might make today. — WP-Bloomberg