Tax reform remains a long shot this fall — just as it always was before, during, and after Republican Rep. Dave Camp flirted with a run for a U.S. Senate seat.
The House Ways and Means Committee chairman announced Friday that he would not run for the Michigan Senate seat, and immediately, the question arose: What, if anything, does it mean for tax reform this fall if Camp does not have to devote major time to campaigning?
Not as much as you might think. Tax reform faced many, many hurdles regardless of the direction of Camp’s future political career. Here are a few to think on:
Revenue: Neither party can agree on how much money any overhaul of the tax system should raise. Democrats want to raise additional revenue to either fund stimulus-like programs or to pay down the deficit. Republicans think tax reform should not raise any more money than the code currently does. Forget finding a compromise on a lower corporate tax rate between the two parties. This is a major philosophical sticking point and one of the biggest impediments.
Little support from leadership: Republican House Speaker John Boehner has said that he has reserved a bill specifically for tax reform; that’s a nice symbolic gesture to support his old friend Camp. But Boehner is not exactly out there selling any specific tax plan to eliminate tax deductions or clean up the code.
The Senate leadership expresses even less enthusiasm. Majority Leader Harry Reid refused to participate in the Senate’s top tax writers’ exercise to examine the tax code. (The Senate Finance Committee leaders had asked lawmakers to defend their favorite tax breaks in private letters, but Reid refused to play along and publicly dissed the process to reporters). A number of top Senate Republicans similarly urged their members to not even wade into tax reform until the revenue question (see above) was settled.
House Democrats: Camp has promised to unveil a tax reform bill within the Ways and Means Committee this fall, but it will be hard to make that appear broadly palatable unless some House Democrats on the committee support it. Tax lobbyists in town are closely watching this process of courting House Democrats. So far, none have publicly signaled their support for a Camp bill. If they don’t, this easily could look like a partisan Republican exercise — another possible killer of tax reform.
Risk to the GOP: And, if few or no House Democrats support Camp’s tax reform draft legislation, then the Republicans run a major political risk. If they propose, for instance, cutting the corporate tax rate and paying for it by slashing some tax deductions near and dear to Americans, then they’ll look like friends to major corporations and wealthy people. That playbook did not work well for Mitt Romney, when the Democrats used it against him in last year’s presidential campaign.
Add all of this up and it reinforces the political difficulty of passing a major tax-reform package in the next year or two, even with all the time and attention Camp can now afford to lavish on the project.
What We're Following See More »
Much has been made of David Brooks’s recent New York Times column, in which confesses to missing already the civility and humanity of Barack Obama, compared to who might take his place. In NewYorker.com, Jeffrey Frank reminds us how critical such attributes are to foreign policy. “It’s hard to imagine Kennedy so casually referring to the leader of Russia as a gangster or a thug. For that matter, it’s hard to imagine any president comparing the Russian leader to Hitler [as] Hillary Clinton did at a private fund-raiser. … Kennedy, who always worried that miscalculation could lead to war, paid close attention to the language of diplomacy.”
“We haven’t seen a true leftist since FDR, so many millions are coming out of the woodwork to vote for Bernie Sanders; he is the Occupy movement now come to life in the political arena.” So says Bill Maher in his Hollywood Reporter cover story (more a stream-of-consciousness riff than an essay, actually). Conservative states may never vote for a socialist in the general election, but “this stuff has never been on the table, and these voters have never been activated.” Maher saves most of his bile for Donald Trump and Sarah Palin, writing that by nominating Palin as vice president “John McCain is the one who opened the Book of the Dead and let the monsters out.” And Trump is picking up where Palin left off.