Big Tax Reform Making It’s Way Through Congress – We Must Now Pressure Senate

House Speaker John Boehner, R-Ohio, said Wednesday that he welcomes a conversation on tax reform, even though the issue is unlikely to go anywhere in Congress in this midterm election year.

The issue was pushed to the forefront by House Ways and Means Committee Chairman Dave Camp, R-Mich., who has been working on a comprehensive tax overhaul proposal for years. The plan he introduced would drop the top income tax rate from 39.6 percent to 25 percent and would reduce the number of income tax brackets from seven to two. It would also impose a surtax on some income above $450,000, though that would not apply to capital gains or investments.

The reforms would be revenue-neutral, which will won’t appeal to Democrats who wanted to raise more money by closing loopholes. Instead, the new tax code would necessarily have to eliminate or reduce some popular tax breaks.
Plan to simplify tax code to be revealed by Ways and Means chairman

“My job is to present this option to the American people,” he told CBS News congressional correspondent Nancy Cordes. “They’ll ultimately decide if we’ll move forward on this or not, but I think when people see we can make their lives better through a simpler, fairer, flatter tax code, I think they’ll be excited about it.”In a Wall Street Journal op-ed out Wednesday, Camp said the guiding principle of the reform is that “everyone should play by the same rules—your tax rate should be determined by what’s fair, not by who you know in Washington.”

Though a complex issue like tax reform could put internal pressure on the GOP, Boehner was careful not to dismiss it out of hand at his weekly press conference Wednesday.

“We all know our tax system is broken, we all know that it frankly gets in the way of economic growth,” he said. “It’s time to have a public conversation about the issue of tax reform, and so I welcome the conversation, frankly I think it will be healthy, it will be informative, and I look forward to it.”

But Boehner stopped short of calling Camp’s draft the official Republican position, saying that would be, “getting a little bit ahead of yourself.”

House Budget Committee Chairman Paul Ryan, R-Wis., who is poised to take over the Ways and Means Committee when Camp’s chairmanship expires at the end of the year, congratulated Camp for putting a proposal on the table and called the plan “the beginning of a good debate.” But as for whether there would be a vote on the plan this year, Ryan said, “That remains to be seen.”

A major obstacle: the Senate leaders of both parties, who have already indicated tax reform has no future in Congress this year.

“I think we will not be able to finish the job, regretfully, in 2014,” Senate Minority Leader Mitch McConnell, R-Ky., said Tuesday. “Now, if we had a new Republican Senate next year, coupled with a Republican House, I think we could have at least a congressional agreement that this is about getting rates down, and making America more competitive.”

Senate Majority Leader Harry Reid, D-Nev., seemed to agree – but blamed the GOP. “The truth is we should have tackled tax reform years ago,” he said. “It would be extremely difficult… with the obstruction that we get here from the Republicans on virtually everything.”