GOP tax plan challenges Democrats
While nobody expects the 979-page draft to go anywhere, the move is at least sparking some reform discussion in Washington.
For a plan labeled dead on arrival before it had actually arrived, Rep. Dave Camp's proposal to overhaul the bloated U.S. tax code has caused quite a stir both in Washington and across the country.
The 979-page "discussion draft" put out by the House Ways and Means chairman (pictured) on Wednesday has little chance of becoming law, with neither party willing to stick its neck out on such a central pocketbook issue, particularly in an election year.
The fact is, though, that Camp has started a debate that everybody agrees needed to begin, but that nobody else had the guts to initiate.
"The debate about needing to do tax reform is over," Camp declared on Wednesday at a news conference. "We have already lost a decade, and before we lose a generation, Washington must enact real, meaningful tax reform to get this economy back on track."
Recognizing that his proposal would trigger howls of protest from various groups seeing pet tax breaks on the chopping block, he said, "You are going to hear a lot about one provision or another provision, or even another provision. But the truth is, people want a simpler, fairer and flatter code."
It will be an uncomfortable debate for both parties, but more so for Republicans as the proposal came from their side of the aisle. Republicans had planned to coast to victory this fall by avoiding any more fiscal controversies and government crises, but will now have to respond to constituent concerns about the impact of Camp's plan on their lives.
Camp, House Speaker John Boehner and a raft of other House and Senate GOP leaders have scrupulously refused until now to point to even one loophole in the federal tax code they would be willing to close, for fear of offending a constituency.On Wednesday, though, Camp pointed to dozens of tax benefits he would either eliminate entirely or change, including such sacred cows as some personal tax exemptions, interest deductions on home mortgages exceeding $500,000, the Earned Income Tax Credit for the poor, special treatment for investment income, and on and on.
The specificity of his plan left Tax Policy experts, many of whom disagree strongly with some of Camp's proposals, thrilled about the seriousness of the proposal.
"Camp deserves a ton of credit," wrote Howard Gleckman, a resident fellow at the Urban Institute and the editor of the Tax Policy Center's TaxVox blog. "He's spent years working on a reform plan. He toured the country promoting the idea and spent countless hours teaching fellow House Republicans what rewriting the code really means."
Gleckman found plenty to criticize in the proposal, but added, "In the end, the details of Camp's plan are less important than the fact that he wrote a plan."
Also thrilled by the plan's release -- though for completely different reasons -- were many Democrats, who see Camp's practically endless list of repealed tax exemptions and credits as a virtual smorgasbord of ingredients for political attack ads during the mid-term elections.
Claiming they had absolutely no opportunity to shape the plan, House Democrats are dismissing it as a partisan broadside at the middle class, and they intend to lash out at it on the campaign trail.
"It's a treasure trove" for the Democrats, a senior House Democratic aide told The Fiscal Times. "If you do it in a partisan way, you reap the whirlwind. Camp didn't have to do it this way. If you put it out in a partisan way, then you better be prepared for a response that's not all flowers and candy."
"Frankly, I don't understand the politics of it," Rep. Jim McDermott (D-Wash.), told Politico. "He knows it's not going anywhere, but it will be used" against his colleagues. "The question will be: Do you support Dave Camp's bill?"
"This is one step in a long road, and I was a little surprised that the Republican leadership told Camp he could go ahead and unveil this because it's going to cause heartburn for a lot of Republicans," said Martin Frost, a lawyer and former Democratic House member and leader from Texas. "It's a very complicated subject and I don't think members of Congress want to go on the record on a lot of these provisions that Camp has offered because it will offend a number of their constituents."
Not everyone was convinced that attacking Republican candidates over a proposal that will likely never even get a vote in the House will be particularly effective.
"This is just the latest iteration of the Democrats' spaghetti strategy," said Andrea Bozek, spokesperson for the National Republican Congressional Committee. "They're trying to throw any attack at the wall and see if it sticks, but all of the attacks are falling flat."
Ron Bonjean, a former House GOP communications director and a Washington policy adviser said, "If Republicans don't distance themselves from the plan, then they are at risk of being attacked by Democrats for threatening its adoption. However, because the plan is only a plan and not likely to be voted on, it would be pretty easy for most Republicans to simply walk away from it.
Even some longtime Democratic operatives are skeptical about possibility of scoring political points on the basis of Camp's plan.
"I'm sure that some are going to try, but I'm not sure how effective it will be," said Jim Manley, a former spokesman for Senate Majority Leader Harry Reid. "After all, this isn't a piece of legislation, just a discussion draft. Very few Republicans even felt the need to respond to it."
In fact, Democrats really can't be overly dismissive. Camp spent the better part of two years working closely with former Democratic Senate Finance Committee Chairman Max Baucus in search of a bipartisan approach to tax reform and he enjoys the respect of many of the Democrats on his committee. Moreover, members of both parties acknowledge that there is almost never a good time for tax reform, and at some point someone has try to force the issue.
"We need to be engaged in the big issues of the day, growing the economy, creating jobs, and have specific proposals to do that are what the American people sent us here to do," Camp told Bloomberg TV's Peter Cook Thursday. "They didn't send us here to warm a chair. So we need to try to make a difference. This is one way to do it and I'm really excited about moving ahead on it."
More from The Fiscal Times
VIDEO ON MSN MONEY
Taxes on wages (in any form – flat or progressive) are the greatest evil of our American Republic. When government is free to steal from you, there are no limits to waste and abuse in government. If a person chooses to work extra hours or two jobs in order to better provide for themselves or their family, they should not be penalized, but that is what happens. The more you make by working harder and longer, the more money is stolen from you, and given to those who spend their lives living off the hard work of others.
The revenue the government needs to provide legitimate constitutional services should be obtained primarily from a national sales tax instead of a tax on wages. All would pay based on consumption, the more you spend the more you pay. The more luxury you surround yourself with, the more you pay. Your choice. A national sales tax system would capture money spent by criminals and by illegal aliens who currently pay near zero in taxes. There would of course need to be exemptions: Cars (already have a federal excise tax) Primary Residence/Rental Properties (vacation homes would be subject to tax/rental profit would be taxed) Fresh Food (Preprocessed foods and prepared meals would be taxed – only fresh/fresh frozen/canned goods would be exempt) Insurance Premiums, Health Care & Certified Education.
Adding another layer of tax to a business would not be fair. Businesses would need to be compensated by keeping a portion of the tax to cover the expense of collection and reporting. A percentage of .20 to .05 would be fair.
You read this article and keep hoping you'll find out what the proposal is that "has caused quite a stir both in Washington and across the country" but you've never heard of even though you listen to the news and talk shows.
You get a little of what it's not, but nothing of what it is. How Kafkaesque!
The Union of Board members and CEO types, usually one and the same, VOTE themselves massive pay increases at the expense of the Working Poor and Fading Middle-Class. They are the ones behind this Flax Tax and certainly they have pushed the Right to Work for Less Push sweeping across America. Trickle Down Economics has never worked. That has been crystal clear as the wage Gap has moved from 40 to 1 to well over 400 to1. That has been crystal clear as the Global Wealth Gap has never been Higher.
The Communist are already here, they go by the name of CEO types and Board Members. They control the Government and literally every election. You cannot HAVE Democracy when every government official is bought and paid for. We need to stop these folks from leeching off the working poor and fading Middle-class. Until that stops, we can never have a viable Tax Plan.
Why should anyone believe you are working harder? It's wrong and unfair that the working poor and fading middle-class are having the product of their Labors stolen by crooks at the Top simply because the top 1% have a Union of Board-members and CEO types while everyone else does not. It's this communist styled top 1% Unions that are destroying America. Too Big to Fail, Too Big to Jail has proven that.
Idiot after Idiot will come here to post how they are supporting everyone else when the FACT of the Matter is they are the ones being supported. Supported mine you at the expense of everyone else. The Real Costs of the Working Poor and Fading Middle-Class are always always overlooked. Mere Tax Rates hardly reveal the entire picture, and it never has.
But guess when the National DEBT didn't Double or Triple, Bill Clinton. And yes, Tax Rates were higher, and the economy was Creating Jobs along with expanding.
Now we can debate until the Cows come home to how we came to our current Debt Levels. Bottom line, that ship has already sailed. We now have to deal with it. Based on the assumption of eventually rising Rates based on Global Debt Levels, it not unreal to expect the National Debt to continually double every 8 years or less. Therefore all these talk of a Flat Tax is pure Alice in Wonderland thinking. There's a better chance of Hades freezing over.
When it's all said and done, Tax RATES for everyone will be going UP, not down. Folks are going to realize how the Social Security and Medicare Trust Funds have been stolen from the very ones now calling for a Flat Tax. Folks are going to realize that their private and or Public Pensions have been raided by the very same folks, now calling for a Flat Tax. When this all comes to a Head, the Folks now calling for a Flat Tax will calling Today's current Rates, the Good Old Days. No amount of Negative and or positive recs on a posting Board is going to change that coming Reality concerning future Tax Rates.
A Flax TAX just ignores the Costs and Real Life Taxes of the Working Poor and Fading Middle-Class. It's ignorance at the highest Level. This Nation and it's Wealth has been BUILT off the Labors of the Working Poor and Fading Middle-Class. Yet it's the Union of Board Members and CEO types, usually one and the same that get to determine how to slice the Wealth of those Labors.
To simply ignore that those at the bottom and in the Middle produced that record Wealth and Income yet saw very little benefit from it, is the Height of Ignorance. The Working Poor and the fading Middle-Class do all the actual Work yet the Barking Dogs get all the Credit and Benefits. This something only Hitler Types can be proud of. And guess what, it's rated best post. The dumbing down of America Continues.
Working For Whom?
I think Monday will be my day to work for the almost seniors signing up for obocare.
Tuesday I'll work for the illegals getting my money from the government.
Wednesday I'll work for all the lazy azzes collecting welfare.
Thursday I'll work for the politicians and governments do nothing workers.
Friday morning I'll work for all the other countries my government is giving my money away too in military protection foreign welfare.
The first two hours of the afternoon, will pay for all the pigs on food stamps buying soda and junk food.
The next hour will be for all the other taxes I pay and the remainder of the day will be for me, and the state, and the mortgage company…
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