A tax-reform plan and its tepid reception
Let us now praise Rep. Dave Camp, the outgoing Republican chairman of the House Ways and Means Committee, who last week unveiled a comprehensive plan to reform the federal tax code that was at once politically courageous and intellectually consistent — exactly the sort of thing certain to upset the martini carts along K Street.
No sooner had the details been released than the crony capitalists from the energy, real estate and financial services industries were out there criticizing the Michigan Republican for jeopardizing American jobs, American competitiveness and the American dream — every bit of their fulminations self-serving economic nonsense. There was also the predictable whining from the small-business lobby, already heavily favored by the tax code, about how there was nothing new in it for them.
More curious was the reaction from elected officials of both parties, whose polite dismissals took the form of praising Camp for having kicked off a much-needed discussion of tax reform and then acknowledging in some fashion that nothing would actually come of it this year, or maybe ever.
“Blah, blah, blah, blah,” the Republican speaker of the House declared when asked about Camp’s proposal, pretty much summing up the collective reaction of leaders in both houses of Congress.
On this, as on most other issues these days, Republicans can’t seem to decide what they think. They have never been able to reconcile the arithmetic contradiction between their fervent desires for reducing taxes and reducing the federal deficit. While many embrace the idea of simplifying a complex and distortional tax code, they are unwilling to risk losing the political and financial support from the special business interests that have bought and paid for all those breaks. And while they are desperate to demonstrate that they can actually accomplish something, the are so blinded by their hatred of President Obama that they have convinced themselves the only way to win seats in the next election is to do nothing for the rest of the year that might distract attention from Obamacare. It’s all rather pathetic.
More curious was the reaction of the Democrats at the White House and on Capitol Hill, which was certainly more respectful but only marginally more encouraging than that of Republican leaders. After all, here was a credible proposal from a Republican that would increase the share of taxes paid by businesses and the wealthy, lower tax rates for almost everyone else, use a big increase in the standard deduction and child credit to get 95 percent of households out of the business of itemizing deductions, close down the most abusive corporate tax dodges, incorporate White House ideas to close loopholes for hedge fund managers and corporate jets and increase spending on transportation infrastructure — all while coming within shouting distance of raising as much revenue as the present tax code. Oh, and did I mention that it would also create jobs, make American companies more competitive, reduce the cost of tax compliance for households and businesses and generally spur economic growth?
There are, of course, some aspects of Camp’s proposal that Democrats
find unacceptable. But as a starting point for a negotiation over economic policy, Camp’s 978-page blueprint was light years better than anything that has come out of the Republican caucus since 1996. There are two possibilities. One was that Camp was given a flashing yellow light by Republican leaders to float his proposal in an effort to get out in front on the issue of tax reform and demonstrate that theirs was not simply the “party of no,” without actually having to bring anything to a vote.
The other, more likely, is that a frustrated Camp, having traveled the country last year holding hearings on tax reform with his Senate counterpart and facing the expiration of his chairmanship of the tax-writing committee in December, decided to defy his leadership and his caucus and put his proposal out there.
But whether Camp was a scout carrying a phony peace feeler or a high-level defector, the right response for Democrats would have been to welcome him with open arms and accept his invitation to negotiate a bipartisan agreement now — this year. (You gotta love the idea of bringing David Camp to Camp David!)
Even if no agreement was reached, Democrats would have had the perfect vehicle to raise their chosen issues of income inequality and corporate responsibility in the run-up to the November elections.