Hurray for GOP tax plan
The time for tax reform is now, and one Republican has a good idea on how to tackle it, writes syndicated columnist Froma Harrop.
A Republican leader is doing something right ... and good. He is U.S. Rep. David Camp of Michigan. Camp has issued a detailed plan for simplifying the tax code. That’s his duty as chair of the House Ways and Means Committee, which writes tax law.
Reforming the 70,000-page abomination that is our tax laws — and making them fairer — has long been a stated goal of both parties. But it is a notoriously unpleasant job because it involves doing away with tax loopholes that have vocal and deep-pocketed supporters.
Many Republicans don’t want to touch tax reform now for the same reason they don’t want to do immigration reform now. The midterms are in November.
Rather than grapple with tough controversies, GOP political strategists prefer stirring up the voters with vile tales of Obamacare. Repealing the health reforms is not on the table these days, and public support for them continues to grow. But that does not seem to deter determined demagogues.
Shame on them. And shame on Democrats reportedly gleeful that Republicans may have to fight one another over a bunch of controversial tax proposals right before an election. Is it too much for our representatives in Washington to do some work in the next eight months?
“I’m for the concept of tax reform, but many of us have concerns about releasing a plan, considering the likelihood of enacting it this year,” Rep. Patrick McHenry, R-N.C., told Politico.
Right, like tax reform is going to be enacted next year, when the presidential candidates are scurrying around trying to please their bases. Remember the 2012 presidential election, when no Republican would name a single tax loophole he or she would close?
Meanwhile, Politico said, “House Democrats think they’ve been handed a gift.” I wish it quoted one so we’d have someone to bash.
Responsible conservatives have long endorsed cutting the top rates and making up for the resulting loss of revenues by doing away with special tax deals for those with friends in Washington. That could work.
Camp’s plan would shrink the number of individual tax brackets from seven to two — 10 percent and 25 percent. Some liberals won’t cotton to the idea of lowering the tax bracket for the rich. (The top tax rate is now 39.6 percent.)
But there’s a lot in the proposal that courtiers for the “1 percent” won’t like at all. First off, it would add a 10 percent surtax on individual incomes over $450,000.
It would require big banks to pay new taxes on their assets. And it would subject private-equity magnates to the same tax rate on their wage-type income that the police guarding their estates pay. (Private-equity managers now get away with paying the lower investment-income tax rate.)
The proposal would cut the maximum deduction for home mortgages from $1 million to $500,000. Should the rest of us be subsidizing mortgages on mega-mansions? Most would say no, but the real estate industry will fight like tigers to keep this boondoggle going for its richest homebuyers.
Looking at all the numbers, the congressional Joint Committee on Taxation believes the streamlined tax code would “grow” the economy by $3.4 trillion over the next decade, creating almost 2 million new jobs. Importantly, it would increase federal revenues by $700 billion.
One doesn’t have to cheer every detail in the plan — or those missing from it. For example, an unwarranted special tax deal for oil and gas companies would remain in place.
But here is a serious proposal deserving a respectful look. The time for tax reform is now and now. Otherwise, it becomes never or never.
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