House Ways and Means Committee Chairman Dave Camp, R-Mich., expressed optimism on Tuesday that broad tax reform can be accomplished this year, even though Congress will be locked in fierce budget battles over the next few weeks.
Mr. Camp's confidence comes in part from House Speaker John Boehner's decision to designate a comprehensive tax reform bill as H.R. 1, reserving the first spot in the legislation numbering system for that measure. “That sends a strong signal this is going to a priority – not just for the committee, not just for me, but for this Congress,” Mr. Camp said in a meeting with reporters in the panel's Capitol Hill office.
He's promoting reform as a way to simplify the tax and generate economic growth by lowering taxes on businesses and individuals.
Big obstacles stand in the way of an overhaul of the tax code, however. Congress and the Obama administration are likely to be wrangling over the federal budget for weeks.
The first part of the $1.2 trillion sequester is scheduled to go into effect on Friday. On March 27, the government will shut down, unless Congress can agree on a new budget or extend the current one. “I'm not sure how those things are going to fit together [with tax reform] on their own,” said Mr. Camp, who hopes to get a House vote on tax reform this year.
But he stressed that his committee would proceed in what is known as “regular order.” That means that a measure will be developed through a process that includes hearings, subcommittee and full committee votes before proceeding to the House floor.
The Ways and Means panel has established 11 bipartisan working groups to delve into various aspects of tax reform, including financial services. Over the past two years, the committee has held more than 20 hearings. The most recent – on Feb. 14 on charitable deductions -- was a day-long session that featured 40 witnesses. “We're trying to build this legislation from the ground up,” Mr. Camp said.
He is seeking to lower individual and corporate tax rates to 25%. He did not indicate which tax breaks and deductions might be eliminated or trimmed to lower the rates, other than saying that “everything” is on the table. Advocates for retirement-savings incentives are worried that those tax referrals may be whacked during comprehensive reform.
Although he didn't say which tax breaks are on the chopping block, he did assert that comprehensive tax reform would not be used to generate more tax income.
That may put him at odds with President Barack Obama, who is seeking more tax revenue to be used for deficit reduction. Most Republicans have vowed that the tax-rate increases included in the New Year's Day fiscal-cliff bill are all that Mr. Obama will get.
“The comprehensive reform I'm looking at is revenue-neutral,” Mr. Camp said.
One of the areas where Mr. Camp has put out a draft tax-reform proposal involves investment taxes. He said he has received a positive reaction.
“We're getting a lot of good comments,” Mr. Camp said. “It's a complicated area. They're very appreciative of the opportunity to talk about something before it's law and to be part of the process.”