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Sunday, August 12, 2012

Tax Reform Is Coming, No Matter Who Wins the Presidential Election

Wall Street Journal Weekend Interview:   Dave Camp: Is Tax Reform Politically Possible?:

It is now a daily routine: President Obama issues another class-warfare call to arms, demanding that the rich pay higher tax rates starting next year. Along the way he also takes derisive shots at Republicans in Congress, as Mr. Obama insists that they triple income- and investment-tax rates for the affluent next year.

His primary adversary in accomplishing that goal if he wins re-election is likely to be one of those Republicans in Congress: Dave Camp, chairman of the House Ways and Means Committee. Mr. Camp ridicules Obama's plans as a bullet aimed at "small businesses and investors, which will only further weaken the fragile economy."

His twin goals are, first, to back America away from the 2013 tax cliff "so that no one's taxes go up," and second to pass tax reform, creating what he calls "a fairer, flatter and simpler tax code that lowers rates, gets rid of lobbyist loopholes, and creates more growth and jobs." Those two goals are pretty much the polar opposite of what the president is seeking.

The surprise is that Mr. Camp remains upbeat about accomplishing both, including finally cracking the code on tax reform by the end of next year. It's a sure thing if Mitt Romney wins, he thinks, and even possible in a second Obama term. "The next president, no matter who that is, is going to have to lead on this issue," he insists.

This is certainly a minority opinion—so why the optimism? "We're facing a train wreck with the tax system in 2013. Pretty much the whole tax code expires next year—the expiration of the Bush tax cuts, the Alternative Minimum Tax hitting the middle class, the estate tax, and all the rest. Given the weakness of the economy, voters are going to demand that we get this done."

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Comments

Actually, opening up the tax code is more akin to feeding time at the zoo. Expect a banner year for Washington's lobbying legions.

Posted by: Rix | Aug 14, 2012 2:37:14 AM

Obama and the dems will play brinksmanship on the fiscal cliff, delaying action until the last minute in hopes they can strongarm the repubs into agreeing to something stupid, and blaming them if nobody agrees, just like the debt ceiling negociations. It might work too, because the repubs actually care about the country, while the dems only care about making an issue, and also in any blame game, the media will always blame the repubs, regardlesss of facts.

Posted by: richard40 | Aug 14, 2012 10:45:53 AM