WASHINGTON, Feb. 26, 2014 – House Ways and Means Committee Chairman Dave Camp, R-Mich., released draft legislation today that promises sweeping changes to the nation’s tax system, increased economic growth, lower tax rates, and job creation – but the bill faces an up-hill battle to get through Congress.
Camp’s Tax Reform Act aims to create up to 1.8 million new private sector jobs, and simplify the tax code by establishing two individual income brackets. A section-by-section summary of the bill is available here.
“This legislation does not reflect ideas solely advanced by Democrats or ideas solely advanced by Republicans, nor is it limited to the halls of Congress,” Camp said. “Instead, this is a comprehensive plan that reflects input and ideas championed by Congress, the administration and, most importantly, the American people.”
The bill would reduce the current seven individual income tax brackets, ranging from 10 percent to 39.6 percent into two brackets of 10 and 25 percent for virtually all taxable income, ensuring that more than 99 percent of taxpayers face maximum rates of 25 percent or less. The plan would reduce the corporate rate to 25 percent. The legislation would raise the standard deduction to $11,000 for individuals and $22,000 for married couples. The bill would lower tax rates for families and job creators by repealing the Alternative Minimum Tax for individuals, pass-through businesses and corporations.
Camp’s nearly 1,000-page proposal is largely considered dead in the water. Both House Speaker John Boehner, R-Ohio, and Senate Minority Leader Mitch McConnell, R-Ky., said a massive tax reform package has no chance of clearing Congress this year, given the elections and the continued partisanship in both chambers.
White House spokesman Josh Earnest told reporters today the administration found portions of Camp’s proposal “encouraging” and was pleased that it would close some of loopholes “that the president has long advocated closing” – including corporate jet tax loophole and the carried interest tax loophole “and a series of other unfair tax loopholes that don’t contribute to long-term economic growth.”
However, Earnest said the White House was concerned that “there doesn’t appear to be any revenue raised from the proposal that goes to reduce the deficit” and the proposal appears to add to the “long-run deficit.” Earnest said the White House is not expecting any “complicated” tax reform legislation to move this year.
Bob Stallman, president of the American Farm Bureau Federation said the proposal represents a “strong and much-needed start to what will surely be an extensive tax reform discussion.”
“The idea of lowering the top tax rates for both corporations and individuals has obvious attraction,” Stallman said. “We appreciate the chairman’s focus on simplifying and streamlining the tax code. Still, his proposal runs deep and wide and at a level of detail that will require careful analysis.”
Michael J. Toohey, president and chief executive officer of the Waterways Council, Inc., said the legislation includes a recommendation to increase, by 6 cents per-gallon, the 20-cent-per-gallon user fee paid for by inland waterways towboat operators into the Inland Waterways Trust Fund, which funds new construction and major rehabilitation of priority navigation projects on the nation’s inland waterways system.
“As our nation looks to increase exports, create jobs, and facilitate American competitiveness, transportation infrastructure requires investment,” Toohey said. “An increased user fee, paid for and supported by the inland waterways industry, will serve to raise the level of investment in our inland waterways transportation system.”
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