Dave Camp vs The Tax Code

House Ways And Means Committee Chairman Dave Camp’s tax simplification proposal is out (pdf). Waldman provides the knee-jerk liberal response:

The centerpiece is an elimination of most tax brackets, leaving only two, at 10 percent and 25 percent. In a total shocker, that means a huge tax break for the wealthy! I know—I too am amazed that Republicans would propose such a thing.

Pareene has actually read the proposal:

Yes, it contains a tax cut, and effectively cuts tax rates on dividends and carried interest — two huge sources of income for the very rich — but it also taxes large financial institutions, adds a surcharge for very high-income households, and closes some loopholes that primarily benefit wealthy taxpayers.

Drum gives Camp credit “for going after a long laundry list of very specific deductions”:

Camp’s plan is long and includes upwards of a hundred specific tax deductions that he wants to reform or eliminate. There are enough caveats that it’s hard to tell exactly how far his proposals go, but again, kudos to him for making specific proposals at all. His plan may be DOA precisely because he was so specific, but kudos anyway. I’ll be interested in following the reaction as everyone figures out just whose ox would be gored by his various bullet points. Should be fun.

Critics are already dismissing some of Camp’s revenue-raisers as “gimmicks”:

Camp reportedly would allow U.S. companies with overseas operations to repatriate some of their foreign-sourced income at a lower tax rate — which would raise revenue in the short term but not in the longer term. The same would be true with some of the proposed depreciation changes allowed in the proposal.

Chuck Marr, the head of tax policy for the Center on Budget and Policy Priorities, said his organization would oppose any proposal that uses these methods to raise revenue temporarily while cutting taxes permanently. He also questioned whether Camp’s proposal would count against revenue the enactment of so-called tax extenders, provisions such as the research-and-development tax credit, which expired at the end of the year, and are always extended by Congress.

Salmon likes Camp’s proposal for a bank tax:

At heart, this is a Pigovian tax on something (too-big-to-fail financial institutions) we don’t want, and often Pigovian taxes are more effective than regulation when it comes to minimizing such things. What’s more, it’s sharp enough to hurt: JPMorgan, for instance, would have ended up paying about 15% of its 2013 net income in this one tax alone.

For exactly that reason, however, I’m still skeptical that the tax will ever actually arrive. Those ten institutions are extremely powerful, and are more than capable of persuading politicians on both sides of the aisle to vote against a tax which singles them out for pecuniary punishment. The tax was a good idea in 2010, and it’s a good idea today. But it has very little chance of ever becoming a reality.

Pethokoukis thinks “mortgage interest reform is maybe the best of his tax reform plan”:

The [mortgage interest deduction] is a $70-billion-a-year, market distorting subsidy for the purchase of expensive homes by high-income taxpayers. It does little to promote homeownership by Americans of more modest means. There is no sound economic reason to use the tax code to artificially advantage the higher-end real estate sector over other sectors of the economy.

In any case, Brett Logiurato expects the plan to go nowhere:

On Wednesday, even House Speaker John Boehner wouldn’t publicly offer his support for the legislation. In a press conference, he said it was good to start a “conversation” about tax reform. But, when asked if the party was prepared to back Camp’s plan, he told a reporter, ”You’re getting a little bit ahead of yourself.”

Camp is likely making this play because it’s the last year of his chairmanship on the Ways and Means Committee — and because one of the dreams of every Ways and Means chair is to lead a comprehensive overhaul of the nation’s too-complicated tax system.

Howard Gleckman looks further into the future:

In the end, the details of Camp’s plan are less important than the fact that he wrote a plan. His framework, like the ones proposed by President George W. Bush’s orphaned tax reform commission, the Bowles-Simpson fiscal commission, the Bipartisan Policy Center, and others will help inform future efforts to rewrite the code.  Think of Camp’s plan as one big step down a very long road