June 29 (Bloomberg) -- An overhaul of the U.S. tax code should be bipartisan, prevent a net revenue increase and avoid shifts in the tax burden across income groups, said Representative Dave Camp, who will design the Republicans’ planned rewrite of the tax system.
Camp, who wants to cut the top individual and corporate tax rates to 25 percent from 35 percent, doesn’t plan to release a detailed bill before the Nov. 6 election showing what tax breaks he would eliminate or curtail to offset the rate reduction, he said on Bloomberg Television’s “Political Capital with Al Hunt,” airing this weekend.
“It’s not just me issuing a bill and pronouncing from on top of a mountain what we’re going to do,” said Camp, the Michigan Republican who is chairman of the House Ways and Means Committee. “We’re not going to probably put out a bill.”
Camp’s guidelines for a tax overhaul present him with a series of difficult challenges as he makes plans to write a bill and his panel continues a series of hearings.
He wants bipartisanship, which is complicated by his opposition to using the overhaul of the tax code to raise more revenue. Democrats, including President Barack Obama, say that long-term deficit reduction must include higher taxes, particularly for top earners.
Camp also wants to avoid major changes in the distribution of the U.S. tax burden while expressing concern about raising tax rates on capital gains and dividends, which tend to benefit the highest-income taxpayers.
Tax Breaks
His rate reduction targets would require lawmakers to consider curtailing popular tax breaks for mortgage interest and state and local taxes.
In the interview, Camp wouldn’t endorse specific proposals for offsetting rate reductions, such as raising taxes on capital gains and dividends.
“We have to look at where the rest of the world is,” said Camp, who has released a draft of changes to the international tax system. “The rest of the world has much lower investment taxes than we do in the United States.”
Camp also said the code would be “very close to where we are currently” in terms of how progressive it is.
Any revenue increases, he said, would come through economic growth generated from a simpler tax code with lower rates.
“We can raise revenue through pro-growth policies,” he said. “And that’s the real message that people are missing.”
Camp, 58, served on Obama’s bipartisan fiscal commission in 2010 and the congressional deficit-reduction supercommittee in 2011.
Deficit Reduction
On the fiscal commission, Camp voted against the recommendations by its co-chairmen, Democrat Erskine Bowles and Republican Alan Simpson, which called for tax increases as part of a deficit-reduction effort.
In July, the House will vote to extend for one year the tax cuts that expire at the end of 2012, preserving current rates on income, capital gains, dividends and estates.
Camp wants to pair that bill with a process for expediting a tax overhaul in 2013.
He said the process will be similar to the fast-track system used for expediting congressional approval of trade agreements. Under that framework, Congress had a set of deadlines and an up-or-down vote on a proposal coming from the president.
Camp said lawmakers haven’t determined exactly how that process would work for taxes.
Health Care Law
Camp’s committee also has jurisdiction over the health care law, which was upheld by the U.S. Supreme Court yesterday. The House will vote July 11 to repeal the law, repeating a vote from last year.
“I’d like to repeal the bill and I’d like to do it however we can,” he said, showing openness to using a procedure called reconciliation that allows Senate passage with a simple majority. “Imposing the federal government between individuals and their doctors is still wrong. Just because something’s constitutional doesn’t make it a good law.”
Camp distinguished between the federal health care law and the Massachusetts law signed by Republican presidential candidate Mitt Romney, which included a mandate to purchase health insurance and penalties for noncompliance. He said the Supreme Court’s ruling expands the federal government’s taxing power beyond what the country’s founders envisioned.
Asked whether Romney can be an effective political messenger on health care, Camp said: “I think there’s a lot of people messaging against this whole federal, one-size-fits-all health care plan that really imposes the federal government between doctors and patients.”
--Editors: Jodi Schneider, Laurie Asseo
To contact the reporter on this story: Richard Rubin in Washington at [email protected]
To contact the editor responsible for this story: Jodi Schneider at [email protected]
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