(Bloomberg) The top Republican tax writer in Congress will release a draft plan to revamp the U.S. tax code amid political odds that are stacked against him.
Representative Dave Camp, chairman of the House Ways and Means Committee, told Republican members of the panel in a letter yesterday that he plans to release his long-awaited proposal next week as he seeks to lower tax rates and broaden the tax base.
Camp’s plan would face a series of hurdles, including skepticism from top House Republicans about the political risks. He also will encounter opposition from Democrats who want a system that raises more money for the U.S. government instead of the revenue-neutral approach Camp supports.
“This is a big step for tax reform because finally somebody’s put a complete proposal out there, but no one should be confused about how difficult this road is,” said Kenneth Kies, a Republican tax lobbyist who represents companies such as Caterpillar Inc. and Hess Corp. “There’s substantial substantive differences that exist between the two sides.”
Camp has been working on his proposal since he became panel chairman in 2011 as Republicans took control of the House of Representatives.
He has released discussion drafts on pieces of the tax code, though he missed a self-imposed deadline at the end of 2013 to release a complete bill.
Camp recently lost his Senate negotiating partner, former Finance Committee Chairman Max Baucus, a Montana Democrat who was confirmed as the U.S. ambassador to China.
Baucus’s successor as committee chairman, Senator Ron Wyden of Oregon, has said an extension of lapsed tax breaks rather than a broader proposal will be his immediate focus.
Camp’s goals have been to lower top rates to 25 percent, down from 39.6 percent for individuals and 35 percent for corporations. Achieving that would require curtailing some widely used tax breaks, which could include the home mortgage interest deduction and the special deduction for domestic manufacturing.
Those details may prove politically difficult for Republicans to defend, and House leaders have shown little interest in making Camp’s proposal a priority, especially during an election year.
House Speaker John Boehner’s spokesman, Michael Steel, said in an e-mail yesterday that the speaker “strongly supports tax reform” and “thanks Chairman Camp for his continuing work on this important issue.”
Camp, a Michigan Republican, said in his letter, “Many in Washington are scared by the prospects of tax reform; they don’t want to look special interests in the eye and say the game is up.”
“Well, it is,” the chairman wrote. “We simply cannot afford the business-as-usual mentality that keeps Washington comfortable, but complacent.”
Meanwhile, the Obama administration has been urging Congress to focus only on business taxation because of the disagreements on individual tax policy.
Camp’s letter offered no new details about the contents of his plan. He hasn’t committed to a schedule for moving the bill through the committee or to the House floor.
Camp, 60, will reach the end of his tenure as Ways and Means chairman this year because of Republican term limits for committee leaders. That deadline gives him an incentive to act, perhaps setting down a marker that his successors could pick up.
“We can choose to have a real discussion about what tax reform can mean for American families and employers, or we can choose to cower to special interests and maintain the status quo,” he wrote. “Clearly, I choose the former.”